Analyzing the Effects of Labor Standards on U.S. Export Performance: A Time Series Approach With Structural Change

Abstract

We analyze the empirical effects of di¤erent measures of labor standards on the export performance of the United States using annual data for the period 1950-1998, applying a time series approach based on the structural change literature. Hence, we estimate a model with endogenous breaks following the methodology proposed by Bai and Perron (1998). The results show that the labor standards, represented by the number of hours worked, the rate of occupational injuries and the unionization rate, are all very important to explain the behavior of exports for the United States. In particular, we find that low labor standards may both improve or lead to a deterioration in export performance.