Exporting Sweatshops? Evidence from Myanmar

Abstract

There is a long-standing debate over the impact of global trade on workers and firms in developing countries. In this paper the author investigates the causal effect of exporting on working conditions and firm performance in Myanmar. This analysis draws on a new survey the author conducted on Myanmar manufacturing firms from 2013 to 2015. The author uses the rapid opening of Myanmar to foreign trade after 2011 alongside identification strategies that exploit product, geographic and industry variations to obtain causal estimates of the impact of trade. The author finds that exporting has large positive impacts on working conditions in terms of improved fire safety, health-care, union recognition, and wages. The authors results also indicate that exporting increases firm sales, employment, management practice scores, and the likelihood of receiving a labor audit, which is typically required by foreign buyers. This research was funded under the Private Enterprise Development in Low-Income Countries (PEDL) Programme