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Multinational enforcement of labor law: Experimental evidence from Bangladesh’s apparel sector
April 30, 2019•12:00 pm – 1:30 pm
Western stakeholders are increasingly demanding that multinationals sourcing from developing countries be accountable for labor rights and working conditions upstream in their supply chains. In response, many multinationals privately enforce labor standards in these countries, but the effects of their interventions on local firms and workers are unknown. I partnered with a set of multinational retail and apparel firms to enforce local labor laws on their suppliers in Bangladesh. I implemented a randomized controlled trial with 84 Bangladeshi garment factories, randomly enforcing a mandate for worker-manager safety committees in 41 supplier establishments. The intervention significantly improves compliance with the labor law. It also has a small, positive effect on indicators of safety committees’ effectiveness, including measures of physical safety and awareness. Factories with better managerial practices drive these improvements. In contrast, factories with poor managerial practices do not improve compliance or safety, and in these factories, workers’ job satisfaction declines and absenteeism increases.
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About the Speaker:
Laura Boudreau is a Ph.D. candidate in Business and Public Policy at the Haas School of Business, UC Berkeley. Laura’s research interests include labor markets, public and private sector regulation and enforcement, and broader political economy questions in developing countries. Her dissertation research focuses on the role of the private sector in the enforcement of labor laws in Bangladesh, in particular in Bangladesh’s garment sector. She also has several other ongoing projects related to worker empowerment and wellbeing in Bangladesh’s garments sector. Prior to beginning her PhD at Berkeley, Laura was a staff member in The World Bank’s Financial and Private Sector Development Vice Presidency, where she spent three years. Laura graduated from the University of Pennsylvania summa cum laude with a B.S. in Economics and a Minor in French Studies.
David I. Levine is a Professor of Business Administration at Berkeley Haas. His work examines how industrialization has affected children in newly industrializing nations, particularly Indonesia. He has also conducted evaluations in Cambodia, Ghana, Kenya, and Senegal, exploring the impacts of programs promoting micro-health insurance, hunger alleviation, safe water, and solar ovens.