Do Workers in Developing Countries Love Globalization? Analyzing the Informal-Formal Divide

  • Starts: 4:00 pm on Wednesday, December 8, 2021
  • Ends: 5:00 pm on Wednesday, December 8, 2021
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Are citizens in the developing world convinced about the benefits of globalization? Economists typically assume that open markets will better the livelihood of the poor, but surprisingly little rigorous research exists on if and how workers in developing countries actually view globalization.

In a recent study, Nitra Rudra, Professor of Government at Georgetown University and coauthors focused on the largest labor market cleavage in developing countries -- between formal and informal workers -- and developed competing hypotheses about their household's support for foreign direct investment (FDI) -- as a proxy for globalization. Using a unique survey experiment, Rudra found that formal workers in India support foreign investment far more than their informal counterparts, particularly when it involves an American firm. The findings provide new insights on (macro and micro-level ) factors contributing to rising inequality, and call for caution amongst scholars, policymakers, the international business community and others who anticipate globalization will create widespread prosperity.

As part of the Fall 2021 Human Capital Research Seminar, join Nitra Rudra for a virtual research seminar on the informal-formal worker divide on globalization.


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