Abstract: Private labor programs have expanded across supply chains, yet their effects on working conditions remain mixed. How do labor requirements spread without improving working conditions? I argue that suppliers pass responsibility down the supply chain, and written records shape this process. Buyer firms select suppliers on documented labor policies because they cannot observe working conditions inside suppliers. After securing contracts, suppliers demonstrate oversight by setting labor rules for their own suppliers. Using hazard models and stacked difference-in-differences designs on 822,505 buyer–supplier relationships, I find that suppliers with more extensive environmental, social, and governance (ESG) records are more likely to win a first contract with a buyer firm that runs a labor program, while independently reported labor incidents do not predict these contracts. Suppliers then begin setting such rules for their own suppliers, but only after new relationships. Prohibitions on child and forced labor rise modestly, but collective labor rights and labor incidents do not improve.
Moderator: Cameron Ballard-Rosa