Sewing Success?: Employment, Wages, and Poverty following the End of the Multi-fibre Arrangement
Sewing Success? Employment, Wages, and Poverty following the End of the Multi-Fibre Arrangement (MFA) analyzes the impact of the 2004 MFA phaseout on key social indicators in major apparel-exporting developing countries. This study provides important policy insights on how to maximize the poverty-reduction potential of the apparel industry in a post-MFA environment:
The significant post-MFA reallocation of production across countries did not necessarily match predictions. Wage differences explain some of the production shifts, but domestic policies targeting the apparel industry, ownership type, and functional upgrading of the industry also played important roles.
Using exports as a metric of success in terms of reducing poverty is insufficient. Falling exports usually meant a loss of opportunities for low-income workers, but rising exports did not always benefit poor workers. Rising global competition may induce a shift toward higher-value production and services that are often less labor- and female-intensive.
Post-MFA apparel workers experienced changes in both short- and long-run wage components as well as employment. It is important to understand these different determinants of poverty.
Countries that actively promoted industry upgrading or e
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