U.S. Free Trade Agreements and Enforcement of Labor Law in Latin America

23 Pages Posted: 3 Feb 2015

See all articles by Sabina Dewan

Sabina Dewan

JustJobs Network

Lucas Ronconi

Centro de Investigación y Acción Social & CONICET

Multiple version iconThere are 2 versions of this paper

Date Written: November 2014

Abstract

This paper analyzes whether Free Trade Agreements (FTAs) signed between the United States and Latin American countries during the last decade produced higher enforcement of labor regulations. The paper computes before-after estimates of the effect of FTAs on labor inspections and exploits variation across countries using non-signers as a comparison group. The empirical strategy benefits from the fact that about half of Latin American countries have signed a trade agreement with the United States. Difference-in-differences estimates suggest that signing an FTA produced a 20 percent increase in the number of labor inspectors and a 60 percent increase in the number of inspections. The North American Free Trade Agreement (NAFTA), however, does not appear to have the same positive impacts on Mexico. The paper concludes with a discussion of these results.

Keywords: Enforcement, Labor, Trade, Latin America

JEL Classification: F16, J83, K31

Suggested Citation

Dewan, Sabina and Ronconi, Lucas, U.S. Free Trade Agreements and Enforcement of Labor Law in Latin America (November 2014). IDB Working Paper No. IDB-WP-543. Available at SSRN: https://ssrn.com/abstract=2559639 or http://dx.doi.org/10.2139/ssrn.2559639

Sabina Dewan (Contact Author)

JustJobs Network

United States

Lucas Ronconi

Centro de Investigación y Acción Social & CONICET ( email )

Av. Callao 542
Buenos Aires, 1022
Argentina

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