Sweatshop equilibrium

Arbeitspapier

This paper presents a capability-augmented model of on the job search, in which sweatshop conditions stifle the capability of the working poor to search for a job while on the job. The augmented setting unveils a sweatshop equilibrium in an otherwise archetypal Burdett-Mortensen economy, and reconciles a number of oft noted yet perplexing features of sweatshop economies. We demonstrate existence of multiple rational expectation equilibria, graduation pathways out of sweatshops in complete absence of enforcement, and country-specific efficiency and distributional responses to competitive forces and social safety nets depending precisely on whether graduation criteria are met.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 4363

Classification and Topics

• Classification: Wirtschaft ; Unemployment: Models, Duration, Incidence, and Job Search ; Labor Standards: Public Policy ; Economic Development: Human Resources; Human Development; Income Distribution; Migration
• Subject: Sweatshop equilibrium ; on the job search ; capability deficits ; Arbeitsuche ; Arbeitsmobilität ; Arbeitsbedingungen ; Niedriglohn ; Arbeitsmarkttheorie ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Chau, Nancy H.
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2009

Further information

• Handle: http://hdl.handle.net/10419/36159
• URN: urn:nbn:de:101:1-2009092835
• Last update: 10.03.2025, 11:42 AM CET