THIS RESEARCH PROJECT IS CURRENTLY INACTIVE.

This project focused on how economic policies are affecting poverty and wage rates in developing countries in Asia. The project had two components.

The first component studied the livelihood strategies and poverty of farming households in remote rural areas of Eastern India. This research was part of a long-term collaboration between researchers from the EWC, the Indian Statistical Institute in Kolkata, and the International Rice Research Institute (IRRI) based in the Philippines. An IRRI Discussion Paper, Natural resource endowments, subsistence agriculture, and poverty in the Chhotanagpur Plateau, summarized preliminary research findings. The project also produced a policy brief considering the implications of these research findings and another paper that examined farm technical efficiency and its role in determining household welfare.

The second component considered the effect of trade liberalization on labor markets in developing countries. The impact of trade on workers in developing countries is the subject of intense debate. Proponents of trade openness argue that it improves economic opportunities for workers in labor-abundant developing countries, but some economists argue that the benefits of recent trade liberalization in developing countries have mainly benefited a small proportion of highly educated and skilled workers in these countries. An East-West Center Working Paper, Trade and workers: Evidence from the Philippines, analyzes Philippine labor force surveys to consider the impact of increased trade on wage inequality between skilled and less skilled workers and gender-based wage differentials.

In their book, The impact of trade on labor: Issues, perspectives and experiences from developing Asia (2003), EWC Adjunct Fellow Rana Hasan and Professor Devashish Mitra of Syracuse University asked whether workers in poor, developing countries have benefited from their economies becoming more integrated with the global economy. The first part of the book blends theory and empirical analysis to point out that the impact of trade liberalization on labor markets, including adjustment costs, depends on domestic labor market regulation and labor market structure and competitiveness. Part I also provides a detailed discussion of labor standards, including assessment of whether trade access should be linked to a country's labor standards. Part II considers these issues in greater detail for particular issues in China, India, and Indonesia. The chapter on China examines the linkages between foreign direct investment and domestic labor standards; the Indonesia chapter assesses the relationship between trade and wage inequality between skilled and unskilled workers; and the chapter on India focuses on how trade liberalization has influenced manufacturing sector employment while paying special attention to the issue of labor market regulations.

Related Publications

Banik, P., C. Edmonds, N. Fuwa, S.P. Kam, L. Villano, and D.K. Bagchi (2004). Natural resource endowments, subsistence agriculture, and poverty in the Chhotanagpur Plateau. IRRI Discussion Paper No. 47. Manila: International Rice Research Institute.

Hasan, Rana, and Lan Chen (2003). Trade and workers: Evidence from the Philippines. East-West Center Working Paper, Economics Series No. 61. Honolulu: East-West Center.

Hasan, Rana, and Devashish Mitra (2003). The impact of trade on labor: Issues, perspectives and experiences from developing Asia. Amsterdam: Elsevier Science (North Holland).