SHERP

Direct Democracy and Labour Standards of a Small Open Economy

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Authors
Hwang, Uk
Issue Date
2006
Publisher
Seoul Journal of Economics
Citation
Seoul Journal of Economics 19 (No. 4 2006): 405-438
Keywords
Median voter theorem; Endogenous labour standard; Globalization
Abstract
This paper investigates the controversial relationship between
labour standards and globalisation within a 2×2 Heckscher-
Ohlin-Mayer political-economy trade model. We adopt the median
voter model to characterise the labour standards chosen under
majority voting. We found that labour standards are more lax in
economies with large income inequalities. More importantly, we
also show that globalisation may or may not promote stricter
labour standards depending on the factor abundance of each
country. Thus, a race to the bottom is not an necessary
implication of globalisation.
ISSN
1225-0279
Language
English
URI
http://hdl.handle.net/10371/1361
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College of Social Sciences (사회과학대학)Institute of Economics Research (경제연구소)Seoul Journal of EconomicsSeoul Journal of Economics vol.19(4) (Winter 2006)
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