The impact of export processing zones on employment, wages and labour conditions in developing countries

Export processing zones (EPZs), also called free-trade zones, are one of the most common instruments of industrial policy in developed and developing countries. Despite their proliferation and spread across the world, there is little evidence about the impact of EPZs on employment and wages. More importantly, EPZs have been heavily scrutinised by civil society, often accused of employing a ‘race to the bottom’ strategy in terms of labour conditions.

This systematic review by Xavier Cirera and Rajith Lakshman collects, reviews and synthesizes the evidence in relation to the impact of EPZs on employment, wages and labour conditions in developing countries – specifically on freedom of association, health and safety and working hours. The result of synthesizing 59 studies suggests very mixed outcomes in relation to these labour outcomes.