Race to the Bottom: the Impact of Globalization on Labor Markets — a Review of Empirical and Theoretical Evidence

Abstract

Some years ago Rodrik (1997) argued that globalization has gone too far with the negative outweighing its positive impacts. A major concern of policy-makers and researchers in this context is that foreign direct investment (FDI) may relocate inferior, low-wage jobs from high-income countries to labor-abundant economies forcing a competitive downward decline in wages all around, known as ‘race to the bottom’ (RTB) (Wilson 1996, Klevorick 1996, Brown et al. 1996, Singh and Zammit 2004). The RTB issue places labor market dynamics to the forefront of the globalization debate. Surprisingly, and in contrast to the political and moral debate on workers’ rights and labor standards issues, the economics of the labor market has received very little attention to date, although in the wake of the Asian currency collapse, the subject is becoming more topical (tomo (ed.) 2003). This chapter seeks to make a small contribution in this field. These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 28 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.