Trade Liberalization in Agriculture in Developed Nations and Incidence of Child Labour in a Developing Economy

This paper is an attempt to analyse the consequence of trade liberalization in agriculture in the developed countries on the incidence of child labour in a developing economy in terms of a three‐sector general equilibrium model with informal sectors. Adult labour and child labour are substitutes for each other in the two informal sectors of the economy and are used together apart from capital in producing two exportable commodities. The interesting result that appears from the analysis is that agricultural trade liberalization in the developed countries may be effective in bringing down the incidence of child labour in the system. The paper substantiates the desirability of trade liberalization in agriculture in the developed nations from the perspective of the developing economies for reasons other than welfare improvement.