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Inequality, Productivity, and Child Labor: Theory and Evidence

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Abstract

A recent theoretical literature has linked reductions in income inequality to reductions in child labor in countries that are relatively well-off, but has not explored how income distribution affects child labor in very poor countries. We show that while in higher-productivity countries with child labor, a more equal income distribution will reduce or eliminate child labor, in low productivity countries, a more equal distribution of income will exacerbate child labor. Econometric specifications studying child labor among 10- to-14 year olds yield results generally consistent with these predictions. Policy actions that aim to bring about more equality so as to reduce child labor will likely not have the desired effect unless a country in which they are taken is sufficiently wealthy.

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Paper provided by Georgetown University, Department of Economics in its series Working Papers with number gueconwpa~01-01-10.

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Date of creation: 10 Jan 2001
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Handle: RePEc:geo:guwopa:gueconwpa~01-01-10

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Postal: Georgetown University Department of Economics Washington, DC 20057-1036
Phone: 202-687-6074
Fax: 202-687-6102
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Web page: http://econ.georgetown.edu/

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Postal: Marcia Suss Administrative Officer Georgetown University Department of Economics Washington, DC 20057-1036
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Web: http://econ.georgetown.edu/

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  1. Hanushek, Eric A. & Leung, Charles Ka Yui & Yilmaz, Kuzey, 2003. "Redistribution through education and other transfer mechanisms," Journal of Monetary Economics, Elsevier, vol. 50(8), pages 1719-1750, November.
  2. Basu, Kaushik, 1998. "Child labor : cause, consequence, and cure, with remarks on International Labor Standards," Policy Research Working Paper Series 2027, The World Bank.
  3. Persson, Torsten & Tabellini, Guido, 1994. "Is Inequality Harmful for Growth?," American Economic Review, American Economic Association, vol. 84(3), pages 600-621, June.
  4. Rothschild, Michael & Stiglitz, Joseph E., 1970. "Increasing risk: I. A definition," Journal of Economic Theory, Elsevier, vol. 2(3), pages 225-243, September.
  5. Carol Ann Rogers & Kenneth A. Swinnerton, 1999. "The Economics of Child Labor: Comment," American Economic Review, American Economic Association, vol. 89(5), pages 1382-1385, December.
  6. Perotti, Roberto, 1996. " Growth, Income Distribution, and Democracy: What the Data Say," Journal of Economic Growth, Springer, vol. 1(2), pages 149-87, June.
  7. Chernichovsky, Dov, 1985. "Socioeconomic and Demographic Aspects of School Enrollment and Attendance in Rural Botswana," Economic Development and Cultural Change, University of Chicago Press, vol. 33(2), pages 319-32, January.
  8. Kristin J. Forbes, 2000. "A Reassessment of the Relationship between Inequality and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 869-887, September.
  9. Ranjan, Priya, 1999. "An economic analysis of child labor," Economics Letters, Elsevier, vol. 64(1), pages 99-105, July.
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Cited by:
  1. Drusilla K. Brown & Alan V. Deardorff & Robert M Stern, 2001. "Child Labor: Theory, Evidence, and Policy," Working Papers 474, Research Seminar in International Economics, University of Michigan.
  2. Jellal, Mohamed & Tarbalouti, Essaid, 2012. "Institutions éducation et travail des enfants
    [Institutions education and child labor]
    ," MPRA Paper 39384, University Library of Munich, Germany.
  3. Busse, Matthias & Braun, Sebastian, 2003. "Export Structure, FDI and Child Labour," HWWA Discussion Papers 216, Hamburg Institute of International Economics (HWWA).
  4. Congdon Fors, Heather, 2008. "Child Labor: A Review of Recent Theory and Evidence with Policy Implications," Working Papers in Economics 324, University of Gothenburg, Department of Economics.
  5. Congdon Fors, Heather, 2007. "The Determinants of Rural Child Labor: An Application to India," Working Papers in Economics 256, University of Gothenburg, Department of Economics.
  6. Jayanta Sarkar & Dipanwita Sarkar, 2012. "Why does child labour persist with declining poverty?," NCER Working Paper Series 84, National Centre for Econometric Research, revised 21 Nov 2012.

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