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Is bonded labor voluntary? A framework against forced work

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Author Info
Espen Villanger

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Abstract

UN estimate that 20 million are held in bonded labor. Several economic analyses assert that bonded laborers accept these contracts voluntarily, which could imply that a ban would make such laborers worse off. We question the voluntariness of bonded labor, and present a mechanism that keeps workers trapped. With different types of landlords not revealed to the laborer, we show how some landlords manipulate contract terms so that the laborer becomes bonded. Enforcement mechanisms and the monopolistic market for credit thus play a joint role. Providing alternative sources of credit, offer proper conflict resolution institutions over labor-contract disputes and banning could emancipate bonded labor, which would make them better off.

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Paper provided by CMI (Chr. Michelsen Institute), Bergen, Norway in its series CMI Working Papers with number WP 2006: 7.

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Date of creation: 2006
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Handle: RePEc:chm:wpaper:wp2006-7

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Related research
Keywords: Coercion Debt slavery Power Bonded labor Nepal Asia;

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  1. Odd-Helge Fjeldstad, 2005. "Corruption in Tax Administration: Lessons from Institutional Reforms in Uganda," CMI Working Papers WP 2005: 10, CMI (Chr. Michelsen Institute), Bergen, Norway. [Downloadable!]
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  4. Odd-Helge Fjeldstad & Ivar Kolstad & Knut Nygaard, 2006. "Bribes, taxes and regulations: Business constraints for micro enterprises in Tanzania," CMI Working Papers WP 2006: 2, CMI (Chr. Michelsen Institute), Bergen, Norway. [Downloadable!]
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  6. Basu, Kaushik, 1986. "One Kind of Power," Oxford Economic Papers, Oxford University Press, vol. 38(2), pages 259-82, July. [Downloadable!] (restricted)
  7. Bardhan, Pranab K, 1979. "Wages and Unemployment in a Poor Agrarian Economy: A Theoretical and Empirical Analysis," Journal of Political Economy, University of Chicago Press, vol. 87(3), pages 479-500, June. [Downloadable!] (restricted)
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  9. Busse, Matthias & Braun, Sebastian, 2002. "Trade and Investment Effects of Forced Labour: An Empirical Assessment," Discussion Paper Series 26231, Hamburg Institute of International Economics. [Downloadable!]
  10. repec:cup:cbooks:9780521622448 is not listed on IDEAS
  11. Hatlebakk, Magnus, 2002. "A new and robust subgame perfect equilibrium in a model of triadic power relations," Journal of Development Economics, Elsevier, vol. 68(1), pages 225-232, June. [Downloadable!] (restricted)
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  12. Akerlof, George A, 1976. "The Economics of Caste and of the Rat Race and Other Woeful Tales," The Quarterly Journal of Economics, MIT Press, vol. 90(4), pages 599-617, November. [Downloadable!] (restricted)
  13. Bhaduri, Amit, 1977. "On the Formation of Usurious Interest Rates in Backward Agriculture," Cambridge Journal of Economics, Oxford University Press, vol. 1(4), pages 341-52, December.
  14. Arne Wiig, 2005. "Corporate Social Responsibility in the Angolan Oil Industry," CMI Working Papers WP 2005: 8, CMI (Chr. Michelsen Institute), Bergen, Norway. [Downloadable!]
  15. Debra Satz, 2003. "Child Labor: A Normative Perspective," World Bank Economic Review, Oxford University Press, vol. 17(2), pages 297-309, December.
  16. Bardhan, Pranab K, 1983. "Labor-Tying in a Poor Agrarian Economy: A Theoretical and Empirical Analysis," The Quarterly Journal of Economics, MIT Press, vol. 98(3), pages 501-14, August. [Downloadable!] (restricted)
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