Development Monthly Seminar(10/29)

Speaker: Aya Suzuki (University of Tokyo)

Title: ”Welfare Impact of Globalization: Unskilled Workers in the Cut Flower Industry in Ethiopia

Authors: Aya Suzuki, Yukichi Mano (Hitotsubashi University), and Girum Abebe (Ethiopian Development Research Institute)

Time & Date: 18:00 to 19:30 on October 29 (Thursday)

Discussant: Tomoya Matsumoto


While labor-intensive mass production industries typically bring positive economic benefits to countries via employment generation, effects of these industries on their individual workers’ welfare are not very well known.  This paper takes a case of the cut flower industry in Ethiopia to provide such quantitative evidences.  Based on propensity-score matching and propensity weighting regressions, we find that production workers in the cut flower sector earn significantly more and save more regularly than workers in other sectors who have similar characteristics, and the saving amount relative to income level is also higher, even after controlling for the frequency of payment and employment status.  In further analyses, we find that social interaction within farms and co-workers behavior affect the saving behavior of the workers, adding to recent findings on social interaction within firms in other studies.  The subjective valuation of their jobs is also higher in the cut flower sector, particularly in stability and future prospect, but they are not necessarily more satisfied with the type of work they do.  Risk-averse people are more satisfied in the cut flower sector, and age is rewarded more while education is not, at this level of unskilled production workers.

Place: GRIPS, 5L (Lecture room L, 5th floor)