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Impact of Restrictive Trade Policy on Adult Unemployment, Welfare and the Incidence of Child Labour -A Three Sector General Equilibrium Analysis

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Author Info

  • Runa Ray

    ()
    (Department of Economics, Jadavpur University, Calcutta –700032)

  • Biswajit Chatterjee

    ()
    (Planning and Development Unit, Jadavpur University, Calcutta –700032)

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    Abstract

    This paper considers a three sector competitive general equilibrium model of a small open, less developed economy suffering from unemployment problem in the adult labour market on the one hand, and from the existence of employment of child labour on the other . The economy is divided into one rural, and two urban sub-sectors. Four inputs are used in the model among which three are – sector specific in nature. The representative adult worker in this model not only supplies his own labour ,but also sends his children out to work. Factor market distortion in this model is captured by the existence of a factor price differential between urban and rural sectors. The model is used to analyze the effect of imposition of tariff protection in import competing sector on the unemployment of adult workers on the one hand , and on the incidence of child labour supply on the other. An interesting result of the present exercise is that the supply of child labour moves in the opposite direction to the level of unemployment in the adult labour market as the tariff rate protection in import competing sector changes. This result runs counter to the existing view that unemployment in the adult labour market is one of the important causes for the existence of child labour market.

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    Bibliographic Info

    Article provided by The Indian Econometric Society in its journal Journal of Quantitative Economics.

    Volume (Year): 8 (2010)
    Issue (Month): 1 (January)
    Pages: 148-161

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    Handle: RePEc:jqe:jqenew:v:8:y:2010:i:1:p:148-161

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    Related research

    Keywords: Child labour; General equilibrium; Urban adult unemployment; Trade policy;

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    References

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    1. Ranjan, P., 1999. ""Credit Constraints and the Phenomenon of Child Labor"," Papers 98-99-12, California Irvine - School of Social Sciences.
    2. Saqib Jafarey & Sajal Lahiri, 1999. "Will trade sanctions reduce child labour? The role of credit markets," Economics Discussion Papers 500, University of Essex, Department of Economics.
    3. Ranjan Ray, 2002. "The Determinants of Child Labour and Child Schooling in Ghana," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 11(4), pages 561-590, December.
    4. Saqib Jafarey & Sajal Lahiri, 2001. "Child Labour," World Economics, World Economics, Economic & Financial Publishing, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 2(1), pages 69-93, January.
    5. Eric V. Edmonds, 2007. "Child Labor," NBER Working Papers 12926, National Bureau of Economic Research, Inc.
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