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1 Introduction An increasingly globalized world economy creates new economic, cul- tural, and social opportunities. Globalization also poses the challenge of ensuring that workers throughout the world share in these opportunities. In 1998 the International Labour Organization (ILO) adopted the Decla- ration on Fundamental Principles and Rights at Work, a set of core interna- tional labor standards embodying basic workers' rights.1 Carrying out this commitment to workers' rights requires an understanding of labor condi- tions and country-level compliance with these standards. The U.S. Depart- ment of Labor (DOL) contracted with the National Research Council (NRC) of the National Academies to advise the U.S. government on the design of an integrated and comprehensive system to monitor country- level compliance with these core international labor standards. THE NATIONAL ACADEMIES PROJECT The NRC has convened the Committee on Monitoring International Labor Standards (CMILS) to provide expert, science-based advice on moni- toring compliance with international labor standards. 2 The committee has undertaken a two-year project with multiple intersecting activities that will The core labor standards are freedom of association and the effective recognition of the right to collective bargaining, the elimination of all forms of forced or compulsory labor, the effective abolition of child labor, and the elimination of discrimination in respect of employment and occupation. 2Refer to Appendix A for committee membership. 1

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2 HUMAN CAPITAL INVESTMENT identify relevant, valid, reliable, and useful sources of country-level data on labor standards and incorporate them into a database tailored to the current and anticipated needs of DOL's Bureau of International Labor Affairs; assess the quality of existing and potential data and indicators that can be used to systematically monitor labor practices and the effectiveness of enforcement in order to determine compliance with national labor legis- lation and international standards; identify innovative measures to determine compliance with inter- national labor standards on a country-by-country basis and to measure progress on improved labor legislation and enforcement; explore the relationship between labor standards compliance and national policies relating to human capital issues; and recommend sustainable reporting procedures to monitor countries' progress toward implementation of international labor standards. The substantive scope of the CMILS' study includes national compli- ance with the international standards identified in the ILO's 1998 Declara- tion on Fundamental Principles and Rights at Work and issues related to "acceptable conditions of work," as defined in U.S. trade law, including minimum wages, hours of work, and occupational safety and healthy Workshop on Human Capital Investment and International Labor Standards Compliance As part of its mandate, the CMILS is charged with exploring the link- ages between labor standards compliance and human capital investment.4 To what extent do investments in human capital create capacity within 3The CMILS has held a number of public events to gather information for this project. These workshops and forums have been summarized in a series of publications, including NRC (2003a, 2003b, and 2003c), of which this summary is the fourth. The committee's final report (NRC, forthcoming) will include its findings and recommendations. 4The Organisation for Economic Co-operation and Development (OECD) offers a useful definition of human capital: "the knowledge, skills, competencies and attributes em- bodied in individuals that facilitate the creation of personal, social and economic well-being" (OECD, 2001, p. 18). For the purposes of this project, human capital encompasses formal and nonformal education and training for children and adults. Human capital issues related to health are beyond the scope of this project.

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INTRODUCTION 3 nations to comply more effectively with core international labor standards? Conversely, if core labor standards are themselves considered a form of human capital, how does that impact the likelihood that countries will make investments in compliance? These questions became the focus of the committee's work on this task. This task represents a relatively new area of inquiry. The linkage be- tween labor standards and human capital policy has been suggested in some research and policy on child labor but has not yet been explored with re- spect to other core standards. Consequently, the CMILS convened a work- shop on February 27, 2003, to bring international experts together to ex- plore the issues related to this task human capital. The workshop had two purposes: (1) to explore the linkage between country-level investment in education and training and the capacity to attain (and exceed) interna- tional labor standards, and (2) to raise awareness among policymakers about the importance of this linkage in developing long-term strategies for labor standards compliance. The workshop was organized around three themes: a conceptual framework of the linkage, the problem of child labor, and the impacts of stakeholder education and training on compliance with international labor standards. Each presenter received a set of guiding questions to focus his or her presentation. These questions are summarized at the beginning of each of the following chapters. It is important to note that presenters were given broad guidelines because the committee intended the discussion to be ex- ploratory in nature and did not want to preempt certain expertise from . . . . . . . . . emerging oy being too prescriptive about macro versus micro perspectives. See Appendix B for a complete workshop agenda, Appendix C for a list of attendees, and Appendix D for biographical sketches of invited speakers. This workshop summary highlights the day's presentations and discus- sions to communicate to the reader the key ideas raised. The discussions were exploratory in nature, and no definitive conclusions or policy recom- mendations were drawn. This summary does not contain any deliberations, conclusions, or recommendations of the CMILS. Although members of the committee guided workshop planning and guest speaker invitations, they did not participate in the writing of this summary. This resource is offered in hopes that the ideas raised will move forward the debate on compliance with international labor standards.