The Child Labor Problem and the Need for International Labor Standards

Trade Openness, Foreign Direct Investment and Child Labor

“…Despite the caveat with respect to causality, our results do warn against policy recommendations for using trade or investment restrictions as a sanction mechanism to penalize countries that export goods with some contribution of child labor (for example, Palley 2002). Senator Tom Harkin has tried, without success, to get various bills through the US Senate prohibiting the import of goods produced wholly or partly by children (McClintock 2001).…”

Corporate social performance and geographical diversification

“…In contrast to the views expressed above, a significant body of literature has highlighted that if the intensity of stakeholder pressure for CSP varies from country to country, MNCs may select locations in such a way as to minimise, or at least dilute, the strength of such pressure exerted on the firm as a whole (Simerly and Li, 2000;Daly, 1994;Korten, 1995;Vernon, 1992;Gladwin et al, 1995;Greider, 1997;Palley, 2002). To the extent that location decisions are driven by an ability to distance their operations from relatively strenuous demands in their home country (and some other countries) for investment in communities, employee health and safety and/or environmental protection, the resulting pattern of geographical diversification would be expected to result in international firms being subject to less, rather than more, stakeholder pressure to demonstrate social performance (Simerly and Li, 2000).…”

Trade Openness, Foreign Direct Investment and Child Labor

“…More generally, globalization skeptics argue that free trade induces countries to a 'race to the bottom' (Palley 2002). A higher extent of child labor could cut costs to gain the country a competitive advantage over others.…”