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Child Labor and Resistance to Change

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Author Info
Giorgio Bellettini (University of Bologna)
Carlotta Berti Ceroni (University of Bologna)
Gianmarco I.P. Ottaviano (University of Bologna and CEPR)

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Abstract

We study the interactions between technological innovation, investment in human capital and child labor. In our setting new technologies require new skills and new skills can be developed only through schooling. In a two-stage game, first firms decide on innovation, then households decide on education. In equilibrium the presence of inefficient child labor depends on parameters related to technology, parents’ altruism and the diffusion of firm property. When child labor exists, it is due to either firms reluctance to innovate or households’ unwillingness to educate or both. The optimal policy to eliminate child labor depends crucially on its underlying cause. We show that, in some cases, compulsory schooling laws or a ban on child labor are welfare reducing, while a subsidy to innovation is the right tool to eliminate child labor and increase welfare.

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Publisher Info
Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2003.79.

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Date of creation: Sep 2003
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Handle: RePEc:fem:femwpa:2003.79

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Related research
Keywords: Child labor; Innovation;

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Find related papers by JEL classification:
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
O31 - Economic Development, Technological Change, and Growth - - Technological Change - - - Innovation and Invention: Processes and Incentives

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  1. Dessy, Sylvain E. & Pallage, Stephane, 2001. "Child labor and coordination failures," Journal of Development Economics, Elsevier, vol. 65(2), pages 469-476, August. [Downloadable!] (restricted)
    Other versions:
  2. Oded Galor & Omer Moav, 2000. "Das Human Kapital," Working Papers 2000-17, Brown University, Department of Economics. [Downloadable!]
    Other versions:
  3. Ranjan, Priya, 2001. "Credit constraints and the phenomenon of child labor," Journal of Development Economics, Elsevier, vol. 64(1), pages 81-102, February. [Downloadable!] (restricted)
    Other versions:
  4. Cigno, Alessandro & Rosati, Furio C., 2000. "Why do Indian Children Work, and is it Bad for Them?," IZA Discussion Papers 115, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  5. Basu, Kaushik & Van, Pham Hoang, 1998. "The Economics of Child Labor," American Economic Review, American Economic Association, vol. 88(3), pages 412-27, June.
  6. G. Bellettini & C. Berti Ceroni, 2000. "Compulsory schooling laws and the cure against child labor," Working Papers 394, Dipartimento Scienze Economiche, Universita' di Bologna. [Downloadable!]
  7. Levy, Victor, 1985. "Cropping Pattern, Mechanization, Child Labor, and Fertility Behavior in a Farming Economy: Rural Egypt," Economic Development and Cultural Change, University of Chicago Press, vol. 33(4), pages 777-91, July.
  8. 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. [Downloadable!] (restricted)
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  9. Murphy, Kevin M & Shleifer, Andrei & Vishny, Robert W, 1989. "Industrialization and the Big Push," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1003-26, October. [Downloadable!] (restricted)
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  10. Kenneth A. Swinnerton & Carol Ann Rogers, 1999. "The Economics of Child Labor: Comment," American Economic Review, American Economic Association, vol. 89(5), pages 1382-1385, December. [Downloadable!] (restricted)
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  11. Giorgio Bellettini & Carlotta Berti Ceroni, 2004. "Compulsory Schooling Laws and the Cure for Child Labour," Bulletin of Economic Research, Blackwell Publishing, vol. 56(3), pages 227-239, 07. [Downloadable!] (restricted)
  12. 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. [Downloadable!] (restricted)
  13. Dessy, Sylvain E., 2000. "A defense of compulsive measures against child labor," Journal of Development Economics, Elsevier, vol. 62(1), pages 261-275, June. [Downloadable!] (restricted)
  14. Douglas A. Galbi, 1997. "Child labor and the division of labor in the early English cotton mills," Journal of Population Economics, Springer, vol. 10(4), pages 357-375. [Downloadable!] (restricted)
  15. Carol Ann Rogers & Kenneth A. Swinnerton, 1999. "Inequality, Productivity, and Child Labor," Labor and Demography 9907003, EconWPA, revised 30 Jul 1999. [Downloadable!]
  16. Elias Dinopoulos & Paul Segerstrom, 1999. "A Schumpeterian Model of Protection and Relative Wages," American Economic Review, American Economic Association, vol. 89(3), pages 450-472, June. [Downloadable!] (restricted)
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