Does Customer Auditing Help Chinese Workers?

Abstract

The authors find that auditing by downstream firms has limited effects on Chinese firms' adherence to labor standards and other measures of blue-collar workers' well-being. Auditing does not affect the supplier's blue-collar employees' wages, probability of belonging to a union, or likelihood of working overtime. Audited firms, however, are more likely to provide rural migrant workers (who usually face discrimination) with government-sponsored medical insurance, business medical insurance, and unemployment insurance.