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Voting with your Children: A Positive Analysis of Child Labour Laws

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  • Doepke, Matthias
  • Zilibotti, Fabrizio

Abstract

We develop a positive theory of the adoption of child-labour regulation, based on two key mechanisms. First, parental decisions on family size interact with their preferences for child-labour regulation. Second, the supply of child labour affects skilled and unskilled wages. If policies are endogenous, multiple steady-states with different child-labour policies can exist. The model is consistent with international evidence on the incidence of child labour. In particular, it predicts a positive correlation between child labour, fertility and inequality across countries of similar income per capita. The model also predicts that the political support for regulation should increase if a rising skill premium induces parents to choose smaller families. A calibration of the model shows that it can replicate features of the history of the UK in the 19th Century, when regulations were introduced after a period of rising wage inequality, and coincided with rapidly declining fertility and rising educational levels.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3733.

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Date of creation: Feb 2003
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Handle: RePEc:cpr:ceprdp:3733

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Keywords: child labour; dynamic general equilibrium; fertility; inequality; political economy; transition;

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Cited by:
  1. Greenwood, Jeremy & Seshadri, Ananth, 2005. "Technological Progress and Economic Transformation," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 19, pages 1225-1273 Elsevier.
  2. Kevin H. O'Rourke, Ahmed S. Rahman and Alan M. Taylor, 2008. "Luddites and the Demographic Transition," The Institute for International Integration Studies Discussion Paper Series iiisdp266, IIIS.
  3. Kevin H. O’Rourke & Ahmed S. Rahman & Alan M. Taylor, 2007. "Trade, Knowledge and the Industrial Revolution," Development Working Papers 230, Centro Studi Luca d\'Agliano, University of Milano.
  4. Antonio Ciccone & Giovanni Peri, 2003. "Skills’ Substitutability and Technological Progress: U.S. States 1950-1990," CESifo Working Paper Series 1024, CESifo Group Munich.
  5. Kaushik Basu, 2004. "Child labor and the Law: Notes on Possible Pathologies," Harvard Institute of Economic Research Working Papers 2052, Harvard - Institute of Economic Research.

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