Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/142410
Authors: 
Danzer, Alexander M.
Grundke, Robert
Year of Publication: 
2016
Series/Report no.: 
IZA Discussion Papers 9971
Abstract: 
This paper investigates the economic fortunes of coerced vs. free workers in a global supply chain. To identify the differential treatment of otherwise similar workers we resort to a unique exogenous labor demand shock that affects wages in voluntary and involuntary labor relations differently. We identify the wage pass-through by capitalizing on Tajikistan's geographic variation in the suitability for cotton production combined with a surge in the world market price of cotton in 2010/11 in two types of firms: randomly privatized small farms and not yet privatized parastatal farms, the latter of which command political capital to coerce workers. The expansion in land attributed to cotton production led to increases in labor demand and wages for cotton pickers; however, the price hike benefits only workers on entrepreneurial private farms, whereas coerced workers of parastatal enterprises miss out. The results provide evidence for the political economy of labor coercion and for the dependence of the economic lives of many poor on the competitive structure of local labor markets.
Subjects: 
coerced labor
export price
price pass-through
cotton
wage
local labor market
Tajikistan
JEL: 
J47
J43
F16
O13
Q12
Document Type: 
Working Paper

Files in This Item:
File
Size
1.67 MB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.