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Exploitation, Altruism, and Social Welfare: An Economic Exploration

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  • Doepke, Matthias

    ()
    (Northwestern University)

Abstract

Child labor is often condemned as a form of exploitation. I explore how the notion of exploitation, as used in everyday language, can be made precise in economic models of child labor. Exploitation is defined relative to a specific social welfare function. I first show that under the standard dynastic social welfare function, which is commonly applied to intergenerational models, child labor is never exploitative. In contrast, under an inclusive welfare function, which places additional weight on the welfare of children, child labor is always exploitative. Neither welfare function captures the more gradual distinctions that common usage of the term exploitation allows. I resolve this conflict by introducing a welfare function with minimum altruism, in which child labor in a given family is judged relative to a specific social standard. Under this criterion, child labor is exploitative only in families where the parent (or guardian) displays insufficient altruism towards the child. I argue that this welfare function best captures the conventional concept of exploitation and has useful properties for informing political choices regarding child labor.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7449.

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Length: 26 pages
Date of creation: Jun 2013
Date of revision:
Handle: RePEc:iza:izadps:dp7449

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Keywords: child labor; exploitation; social welfare function; altruism;

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  1. Matthias Doepke, . "Origins and Consequences of Child Labor Restrictions: A Macroeconomic Perspective," UCLA Economics Online Papers, UCLA Department of Economics 413, UCLA Department of Economics.
  2. Barro, Robert J, 1974. "Are Government Bonds Net Wealth?," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 82(6), pages 1095-1117, Nov.-Dec..
  3. Matthias Doepke, 2004. "Accounting for Fertility Decline During the Transition to Growth," Journal of Economic Growth, Springer, Springer, vol. 9(3), pages 347-383, 09.
  4. de la Croix,David & Michel,Philippe, 2002. "A Theory of Economic Growth," Cambridge Books, Cambridge University Press, Cambridge University Press, number 9780521001151.
  5. Schoonbroodt, Alice & Tertilt, Michele, 2010. "Property rights and efficiency in OLG models with endogenous fertility," Discussion Paper Series In Economics And Econometrics, Economics Division, School of Social Sciences, University of Southampton 1020, Economics Division, School of Social Sciences, University of Southampton.
  6. Bernheim, B Douglas, 1989. "Intergenerational Altruism, Dynastic Equilibria and Social Welfare," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 56(1), pages 119-28, January.
  7. Basu, Kaushik & Zarghamee, Homa, 2009. "Is product boycott a good idea for controlling child labor? A theoretical investigation," Journal of Development Economics, Elsevier, Elsevier, vol. 88(2), pages 217-220, March.
  8. Horrell Sara & Humphries Jane, 1995. "The Exploitation of Little Children: Child Labor and the Family Economy in the Industrial Revolution," Explorations in Economic History, Elsevier, Elsevier, vol. 32(4), pages 485-516, October.
  9. Kimball, Miles S., 1987. "Making sense of two-sided altruism," Journal of Monetary Economics, Elsevier, Elsevier, vol. 20(2), pages 301-326, September.
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