Trade Openness, Foreign Direct Investment and Child Labor
The skeptics of globalization argue that increased trade openness and foreign direct investment induce developing countries to keep labor costs low, for example, by letting children work. This article argues that there are good theoretical reasons why globalization might actually have the opposite effect. We test this with various measures of child labor and provide the first analysis of foreign investment in addition to trade. We present evidence that countries that are more open to trade and/or have a higher stock of foreign direct investment also have a lower incidence of child labor
What is new in our analysis is that we find evidence that greater penetration by foreign direct investment is associated with lower child labor incidence, a topic neglected before despite the great importance attached to FDI by critics of globalization.
Glädjande, men inte oväntat. Barnarbete är mer sällsynt i mer globaliserade länder, där utländska investeringar är högre. Ett av flera goda argument för ökad globalisering och mer handel mellan nationer.
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