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Thursday, April 27, 2017

Do Sweatshops Lift Workers Out of Poverty?

Christopher Blattman and Stefan Dercon:

Do Sweatshops Lift Workers Out of Poverty?: In the 1990s, Americans learned more about the appalling conditions at the factories where our sneakers and T-shirts were made, and opposition to sweatshops surged. But some economists pushed back. For them, the wages and conditions in sweatshops might be appalling, but they are an improvement on people’s less visible rural poverty.
As the economist Joan Robinson said, “The misery of being exploited by capitalists is nothing compared to the misery of not being exploited at all.”
Textbook economics offers two reasons factory jobs can be “an escalator out of poverty.” ...
Expecting to prove the experts right, we went to Ethiopia and — working with the Innovations for Poverty Action and the Ethiopian Development Research Institute — performed the first randomized trial of industrial employment on workers. Little did we anticipate that everything we believed would turn out to be wrong. ...

    Posted by on Thursday, April 27, 2017 at 09:10 AM in Economics | Permalink  Comments (27)


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