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Nutritional efficiency wages and child labor

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  • Estevez, Kristian

Abstract

This paper formally analyzes the incidence of child labor by employing an overlapping-generations general-equilibrium model of a small open economy. An individual's ability determines whether or not he/she becomes a skilled worker. The supply side of the economy is composed of two sectors: a modern sector that produces a homogeneous good using skilled labor and physical capital; and an agrarian sector that produces a traditional good using unskilled adult labor, child labor, and land. An increase in foreign direct investment and improvements in education reduce the incidence of child labor. Emigration of skilled (unskilled) workers reduces (raises) the supply of child labor, while trade sanctions reduce the demand for child labor. Child wage subsidies have an ambiguous effect on the incidence of child labor while education subsidies are effective in reducing the incidence of child labor. Simulation analysis is used to investigate the welfare effects of the aforementioned policies.

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Bibliographic Info

Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 28 (2011)
Issue (Month): 4 (July)
Pages: 1793-1801

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Handle: RePEc:eee:ecmode:v:28:y:2011:i:4:p:1793-1801

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Web page: http://www.elsevier.com/locate/inca/30411

Related research

Keywords: Child labor Economic development Efficiency wages Skill acquisition Trade;

References

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  1. Kruger, Diana I., 2007. "Coffee production effects on child labor and schooling in rural Brazil," Journal of Development Economics, Elsevier, vol. 82(2), pages 448-463, March.
  2. Eric Neumayer & Indra de Soysa, 2003. "Trade Openness, Foreign Direct Investment and Child Labor," International Trade, EconWPA 0312001, EconWPA, revised 16 Mar 2004.
  3. Elias Dinopoulos & Laixun Zhao, 2006. "Child Labor and Globalization," Discussion Paper Series, Research Institute for Economics & Business Administration, Kobe University 198, Research Institute for Economics & Business Administration, Kobe University.
  4. Paul Schultz, T., 2004. "School subsidies for the poor: evaluating the Mexican Progresa poverty program," Journal of Development Economics, Elsevier, vol. 74(1), pages 199-250, June.
  5. Basu, Kaushik & Van, Pham Hoang, 1998. "The Economics of Child Labor," American Economic Review, American Economic Association, American Economic Association, vol. 88(3), pages 412-27, June.
  6. Ravallion, Martin & Wodon, Quentin, 1999. "Does child labor displace schooling? - evidence on behavioral responses to an enrollment subsidy," Policy Research Working Paper Series 2116, The World Bank.
  7. Gupta, Manash Ranjan, 2000. "Wage Determination of a Child Worker: A Theoretical Analysis," Review of Development Economics, Wiley Blackwell, Wiley Blackwell, vol. 4(2), pages 219-28, June.
  8. Basu, Kaushik, 1998. "Child labor : cause, consequence, and cure, with remarks on International Labor Standards," Policy Research Working Paper Series 2027, The World Bank.
  9. Edmonds, Eric V. & Pavcnik, Nina, 2005. "The effect of trade liberalization on child labor," Journal of International Economics, Elsevier, Elsevier, vol. 65(2), pages 401-419, March.
  10. Ranjan, Priya, 2001. "Credit constraints and the phenomenon of child labor," Journal of Development Economics, Elsevier, vol. 64(1), pages 81-102, February.
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