IDEAS home Printed from https://ideas.repec.org/a/eee/jcecon/v46y2018i2p480-494.html
   My bibliography  Save this article

Child labor and the minimum wage: Evidence from India

Author

Listed:
  • Menon, Nidhiya
  • Rodgers, Yana van der Meulen

Abstract

This study examines how changes in the minimum wage affect child labor in India. The analysis uses repeated cross sections of India's NSSO employment data from 1983 to 2008 merged with data on state-level minimum wage rates. Theoretically, the impact of the minimum wage on child work could go either way, so empirical evidence from a country with high rates of child labor and a myriad of minimum wage laws across states and industries helps to lessen the ambiguity. Results indicate that regardless of gender, in urban areas, a higher minimum wage reduces child labor in household work. In rural areas a similar result applies for girls while household labor does rise for boys. The minimum wage has virtually no impact on child work outside of the home across urban and rural areas.

Suggested Citation

  • Menon, Nidhiya & Rodgers, Yana van der Meulen, 2018. "Child labor and the minimum wage: Evidence from India," Journal of Comparative Economics, Elsevier, vol. 46(2), pages 480-494.
    • Handle: RePEc:eee:jcecon:v:46:y:2018:i:2:p:480-494
    DOI: 10.1016/j.jce.2017.09.001
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0147596717300690
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jce.2017.09.001?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Eric V. Edmonds & Norbert Schady, 2012. "Poverty Alleviation and Child Labor," American Economic Journal: Economic Policy, American Economic Association, vol. 4(4), pages 100-124, November.
    2. Patrick M. Emerson & Vladimir Ponczek & André Portela Souza, 2017. "Child Labor and Learning," Economic Development and Cultural Change, University of Chicago Press, vol. 65(2), pages 265-296.
    3. Kaushik Basu, 1999. "Child Labor: Cause, Consequence, and Cure, with Remarks on International Labor Standards," Journal of Economic Literature, American Economic Association, vol. 37(3), pages 1083-1119, September.
    4. Sylvia A. Allegretto & Arindrajit Dube & Michael Reich, 2011. "Do Minimum Wages Really Reduce Teen Employment? Accounting for Heterogeneity and Selectivity in State Panel Data," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 50(2), pages 205-240, April.
    5. Basu, Kaushik & Das, Sanghamitra & Dutta, Bhaskar, 2010. "Child labor and household wealth: Theory and empirical evidence of an inverted-U," Journal of Development Economics, Elsevier, vol. 91(1), pages 8-14, January.
    6. Ranjan, Priya, 2001. "Credit constraints and the phenomenon of child labor," Journal of Development Economics, Elsevier, vol. 64(1), pages 81-102, February.
    7. Amin, Mohammad, 2009. "Labor regulation and employment in India's retail stores," Journal of Comparative Economics, Elsevier, vol. 37(1), pages 47-61, March.
    8. Jean-Marie Baland & James A. Robinson, 2000. "Is Child Labor Inefficient?," Journal of Political Economy, University of Chicago Press, vol. 108(4), pages 663-679, August.
    9. Sonia Bhalotra & Christopher Heady, 2003. "Child Farm Labor: The Wealth Paradox," The World Bank Economic Review, World Bank, vol. 17(2), pages 197-227, December.
    10. David Card, 1992. "Using Regional Variation in Wages to Measure the Effects of the Federal Minimum Wage," ILR Review, Cornell University, ILR School, vol. 46(1), pages 22-37, October.
    11. Rodrigo R. Soares & Diana Kruger & Matias Berthelon, 2012. "Household Choices of Child Labor and Schooling: A Simple Model with Application to Brazil," Journal of Human Resources, University of Wisconsin Press, vol. 47(1), pages 1-31.
    12. Basu, Kaushik, 2000. "The Intriguing Relation between Adult Minimum Wage and Child Labour," Economic Journal, Royal Economic Society, vol. 110(462), pages 50-61, March.
    13. Eric V. Edmonds, 2005. "Does Child Labor Decline with Improving Economic Status?," Journal of Human Resources, University of Wisconsin Press, vol. 40(1).
    14. Yana van der Meulen Rodgers & Nidhiya Menon, 2013. "Labor Regulations and Job Quality: Evidence from India," ILR Review, Cornell University, ILR School, vol. 66(4), pages 933-957, July.
    15. Ralitza Dimova & Gil S. Epstein & Ira N. Gang, 2015. "Migration, Transfers and Child Labor," Review of Development Economics, Wiley Blackwell, vol. 19(3), pages 735-747, August.
    16. Stephan Klasen & Janneke Pieters, 2015. "What Explains the Stagnation of Female Labor Force Participation in Urban India?," The World Bank Economic Review, World Bank, vol. 29(3), pages 449-478.
    17. David Card, 1992. "Using Regional Variation in Wages to Measure the Effects of the Federal Minimum Wage," Working Papers 680, Princeton University, Department of Economics, Industrial Relations Section..
    18. Basu, Kaushik & Van, Pham Hoang, 1998. "The Economics of Child Labor," American Economic Review, American Economic Association, vol. 88(3), pages 412-427, June.
    19. Kaushik Basu & Zafiris Tzannatos, 2003. "The Global Child Labor Problem: What Do We Know and What Can We Do?," The World Bank Economic Review, World Bank, vol. 17(2), pages 147-173, December.
    20. Timothy Besley & Robin Burgess, 2004. "Can Labor Regulation Hinder Economic Performance? Evidence from India," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 91-134.
    21. repec:fth:prinin:300 is not listed on IDEAS
    22. Kaivan Munshi & Mark R. Rosenzweig, 2005. "Why is Mobility in India so Low? Social Insurance, Inequality, and Growth," CID Working Papers 121, Center for International Development at Harvard University.
    23. Dessing, Maryke, 2004. "Implications for minimum-wage policies of an S-shaped labor-supply curve," Journal of Economic Behavior & Organization, Elsevier, vol. 53(4), pages 543-568, April.
    24. Jackline Wahba, 2006. "The influence of market wages and parental history on child labour and schooling in Egypt," Journal of Population Economics, Springer;European Society for Population Economics, vol. 19(4), pages 823-852, October.
    25. Marigee P. Bacolod & Priya Ranjan, 2008. "Why Children Work, Attend School, or Stay Idle: The Roles of Ability and Household Wealth," Economic Development and Cultural Change, University of Chicago Press, vol. 56(4), pages 791-828, July.
    26. Krisztina Kis-Katos & Robert Sparrow, 2011. "Child Labor and Trade Liberalization in Indonesia," Journal of Human Resources, University of Wisconsin Press, vol. 46(4), pages 722-749.
    27. Belser, Patrick. & Rani, Uma., 2010. "Extending the coverage of minimum wages in India : simulations from household data," ILO Working Papers 994584553402676, International Labour Organization.
    28. Dammert, Ana C. & Galdo, Jose, 2013. "Child Labor Variation by Type of Respondent: Evidence from a Large-Scale Study," World Development, Elsevier, vol. 51(C), pages 207-220.
    29. David Neumark & J. M. Ian Salas & William Wascher, 2014. "Revisiting the Minimum Wage—Employment Debate: Throwing Out the Baby with the Bathwater?," ILR Review, Cornell University, ILR School, vol. 67(3_suppl), pages 608-648, May.
    30. Edmonds, Eric V., 2006. "Child labor and schooling responses to anticipated income in South Africa," Journal of Development Economics, Elsevier, vol. 81(2), pages 386-414, December.
    31. Wahba, J., 2006. "The influence of market wages and parental history on child labour and schooling in Egypt," Discussion Paper Series In Economics And Econometrics 0603, Economics Division, School of Social Sciences, University of Southampton.
    32. Eliana Cardoso & Andre Portela Souza, 2004. "The Impact of Cash Transfers on Child Labor and School Attendance in Brazil," Vanderbilt University Department of Economics Working Papers 0407, Vanderbilt University Department of Economics.
    33. Dale Belman & Paul J. Wolfson, 2014. "What Does the Minimum Wage Do?," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number wdmwd, August.
    34. Ray, Ranjan, 2000. "Child Labor, Child Schooling, and Their Interaction with Adult Labor: Empirical Evidence for Peru and Pakistan," The World Bank Economic Review, World Bank, vol. 14(2), pages 347-367, May.
    35. Nidhiya Menon & Yana van der Meulen Rodgers, 2017. "The Impact of the Minimum Wage on Male and Female Employment and Earnings in India," Asian Development Review, MIT Press, vol. 34(1), pages 28-64, March.
    36. Nidhiya Menon & Yana van der Meulen Rodgers, 2017. "The Impact of the Minimum Wage on Male and Female Employment and Earnings in India," Asian Development Review, MIT Press, vol. 34(1), pages 28-64, March.
    37. Kaushik Basu, 1999. "International Labor Standards and Child Labor," Challenge, Taylor & Francis Journals, vol. 42(5), pages 80-93, September.
    38. Wahba, J., 2006. "The influence of market wages and parental history on child labour and schooling in Egypt," Discussion Paper Series In Economics And Econometrics 603, Economics Division, School of Social Sciences, University of Southampton.
    39. Ahsan, Ahmad & Pagés, Carmen, 2009. "Are all labor regulations equal? Evidence from Indian manufacturing," Journal of Comparative Economics, Elsevier, vol. 37(1), pages 62-75, March.
    40. Beegle, Kathleen & Dehejia, Rajeev H. & Gatti, Roberta, 2006. "Child labor and agricultural shocks," Journal of Development Economics, Elsevier, vol. 81(1), pages 80-96, October.
    41. Azam, Mehtabul, 2012. "The Impact of Indian Job Guarantee Scheme on Labor Market Outcomes: Evidence from a Natural Experiment," IZA Discussion Papers 6548, Institute of Labor Economics (IZA).
    42. Uma RANI & Patrick BELSER & Martin OELZ & Setareh RANJBAR, 2013. "Minimum wage coverage and compliance in developing countries," International Labour Review, International Labour Organization, vol. 152(3-4), pages 381-410, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gudibande, Rohan Ravindra & Jacob, Arun, 2020. "Minimum wages for domestic workers: impact evaluation of the Indian experience," World Development, Elsevier, vol. 130(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dammert, Ana C. & de Hoop, Jacobus & Mvukiyehe, Eric & Rosati, Furio C., 2018. "Effects of public policy on child labor: Current knowledge, gaps, and implications for program design," World Development, Elsevier, vol. 110(C), pages 104-123.
    2. Huamaní-Huapaya, Edson Raúl, 2019. "Persistencia Intergeneracional del Trabajo Infantil y Adolescente en Perú [Intergenerational Persistence of Child Labor in Peru]," MPRA Paper 101247, University Library of Munich, Germany.
    3. Edmonds, Eric V., 2008. "Child Labor," Handbook of Development Economics, in: T. Paul Schultz & John A. Strauss (ed.), Handbook of Development Economics, edition 1, volume 4, chapter 57, pages 3607-3709, Elsevier.
    4. Eric V. Edmonds & Norbert Schady, 2012. "Poverty Alleviation and Child Labor," American Economic Journal: Economic Policy, American Economic Association, vol. 4(4), pages 100-124, November.
    5. Eugenia Fotoniata & Thomas Moutos, 2013. "Product Quality, Informality, and Child Labor," Review of Development Economics, Wiley Blackwell, vol. 17(2), pages 268-283, May.
    6. Nidhiya Menon & Yana van der Meulen Rodgers, 2017. "The Impact of the Minimum Wage on Male and Female Employment and Earnings in India," Asian Development Review, MIT Press, vol. 34(1), pages 28-64, March.
    7. Goto, Hideaki, 2011. "Social norms, inequality and child labor," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(6), pages 806-814.
    8. Marion Dovis & Patricia Augier & Clémentine Sadania, 2021. "Labor Market Shocks and Youths’ Time Allocation in Egypt: Where Does Women’s Empowerment Come In?," Economic Development and Cultural Change, University of Chicago Press, vol. 69(4), pages 1501-1540.
    9. Krisztina Kis-Katos, 2012. "Gender differences in work-schooling decisions in rural North India," Review of Economics of the Household, Springer, vol. 10(4), pages 491-519, December.
    10. Heather Congdon Fors, 2012. "Child Labour: A Review Of Recent Theory And Evidence With Policy Implications," Journal of Economic Surveys, Wiley Blackwell, vol. 26(4), pages 570-593, September.
    11. Chaudhuri, Sanjukta, 2009. "The School Going Child Worker: An Analysis of Poverty, Asset Inequality and Child Education in Rural India," MPRA Paper 19687, University Library of Munich, Germany.
    12. Fabre, Alice & Pallage, Stéphane, 2015. "Child labor, idiosyncratic shocks, and social policy," Journal of Macroeconomics, Elsevier, vol. 45(C), pages 394-411.
    13. Tang, Can & Zhao, Zhong, 2023. "Informal institution meets child development: Clan culture and child labor in China," Journal of Comparative Economics, Elsevier, vol. 51(1), pages 277-294.
    14. Congdon Fors, Heather, 2024. "Child Labour Background, Challenges, and the Role of Research in Achieving Sustainable Development Goal 8.7," Working Papers in Economics 840, University of Gothenburg, Department of Economics.
    15. Oryoie, Ali Reza & Alwang, Jeffrey & Tideman, Nicolaus, 2017. "Child Labor and Household Land Holding: Theory and Empirical Evidence from Zimbabwe," World Development, Elsevier, vol. 100(C), pages 45-58.
    16. Burrone, Sara & Giannelli, Gianna Claudia, 2019. "Does Child Labor Lead to Vulnerable Employment in Adulthood? Evidence for Tanzania," IZA Discussion Papers 12162, Institute of Labor Economics (IZA).
    17. Ralitza Dimova & Gil S. Epstein & Ira N. Gang, 2015. "Migration, Transfers and Child Labor," Review of Development Economics, Wiley Blackwell, vol. 19(3), pages 735-747, August.
    18. Yonatan Dinku & David Fielding & Murat Genç, 2018. "Health shocks and child time allocation decisions by households: evidence from Ethiopia," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 7(1), pages 1-23, December.
    19. Prashant Bharadwaj & Leah K Lakdawala & Nicholas Li, 2020. "Perverse Consequences of Well Intentioned Regulation: Evidence from India’s Child Labor Ban," Journal of the European Economic Association, European Economic Association, vol. 18(3), pages 1158-1195.
    20. Lutfullah Lutf & Shahadat I Haq Yasini, 2018. "Factors Contributing to Child Labor in Afghanistan: A Case Study in Jalalabad City," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 3, pages 348-372, September.

    More about this item

    Keywords

    Minimum wage; Employment; Child labor; India;
    All these keywords.

    JEL classification:

    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jcecon:v:46:y:2018:i:2:p:480-494. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/622864 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.