Can workers in developing countries take advantage of trade? Alexander M. Danzer (KU Eichstätt-Ingolstadt) and Robert Grundke (OECD) answer this question by using fluctuations in the world market price for cotton and identifying the effects of higher export prices on the wages of poor agricultural workers in the cotton harvest, using the example of Tajikistan. The increased demand for workers during the high price episode doubles wages for cotton pickers on small private farms, but has no impact on wages on large parastatal farms. The different treatment of workers is due to market power and the continued use of coerced labor in large companies during the cotton harvest, not least of school children and university students. The research concludes that trade produces winners and losers based on the political power relations between local decision makers and managers of parastatal farms.

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