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Does Customer Auditing Help Chinese Workers?

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Executive Summary

Auditing by a downstream firm of a Chinese supplier does not affect that the supplier's blue-collar employees' wages, probability of belonging to a union, or likelihood of working overtime. However, auditing makes it more likely that rural migrant workers receive pensions, business medical insurance, and unemployment insurance. The authors examine whether downstream firms' auditing affects Chinese firms' adherence to labor standards and other measures of blue collar workers' well-being. They find no evidence that auditing affects adherence of labor standards, but auditing does increase the likelihood that the most disadvantaged workers - rural migrants - receive pensions and medical and unemployment insurance.

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