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Child Labor and Globalization

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Author Info

  • Elias Dinopoulos

    (Department of Economics, University of Florida, USA)

  • Laixun Zhao

    (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan)

Abstract

The paper embeds child labor in a standard two-sector general-equilibrium model of a small open economy facing perfectly competitive markets, efficiency wages, and free-trade. The modern sector produces a homogeneous good using skilled adult labor and capital, and offers effort-based efficiency wages. The agrarian (traditional) sector produces a homogeneous good using unskilled (child and adult) labor and skilled adult labor, and offers nutritional efficiency wages to child workers. Nutritional efficiency wages introduce wage stickiness and transform the economy into a dual one with unlimited supply of child labor. Trade policies that increase the output of the modern sector reduce the incidence of child labor and the dispersion of wages between adult skilled workers and unskilled workers. Emigration of skilled adult workers reduces the incidence of child labor, whereas emigration of unskilled adult workers has the opposite effect. Domestic subsidies that reduce the child wage increase the incidence of child labor; and a ban on child-labor benefits unskilled adult workers but hurts skilled adult workers.

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File URL: http://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/dp198.pdf
File Function: First version, 2006
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Bibliographic Info

Paper provided by Research Institute for Economics & Business Administration, Kobe University in its series Discussion Paper Series with number 198.

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Length: 28 pages
Date of creation: Dec 2006
Date of revision:
Handle: RePEc:kob:dpaper:198

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Related research

Keywords: Child-labor; Efficiency wages; Wage income inequality; Globalization; Direct foreign investment;

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Citations

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Cited by:
  1. Siroën, Jean-Marc, 2012. "Core labour standards and exports," Economics Papers from University Paris Dauphine 123456789/10660, Paris Dauphine University.
  2. De Paoli, Anna & Mendola, Mariapia, 2014. "International Labor Mobility and Child Work in Developing Countries," IZA Discussion Papers 8066, Institute for the Study of Labor (IZA).
  3. Jean-Marie Cardebat & Alexandru Dimitrescu, 2011. "Social Responsibility of the countries and their international trade : A gravitational approach," Larefi Working Papers 1102, Larefi, Université Bordeaux 4.
  4. Estevez, Kristian, 2011. "Nutritional efficiency wages and child labor," Economic Modelling, Elsevier, vol. 28(4), pages 1793-1801, July.
  5. Kaushik Basu & Homa Zarghamee, 2008. "Product boycott a good idea for controlling child labor? A theoretical investigation," Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers 08-09, Indian Statistical Institute, New Delhi, India.
  6. Siroën, Jean-Marc & Bazillier, Remi & Duc, Cindy & Arestoff, Florence & Granger, Clotilde, . "Les normes de travail dans les traités de libre-échange," Economics Papers from University Paris Dauphine 123456789/3202, Paris Dauphine University.
  7. Siroën, Jean-Marc, 2010. "Social Innovations vs international Trade? Core labour standards and exports," Economics Papers from University Paris Dauphine 123456789/5831, Paris Dauphine University.
  8. Anna De Paoli & Mariapia Mendola, 2014. "International Labor Mobility and Child Work in Developing Countries," Development Working Papers 365, Centro Studi Luca d\'Agliano, University of Milano, revised 07 Apr 2014.
  9. Basu, Kaushik & Zarghamee, Homa, 2009. "Is product boycott a good idea for controlling child labor? A theoretical investigation," Journal of Development Economics, Elsevier, vol. 88(2), pages 217-220, March.
  10. Eugenia Fotoniata & Thomas Moutos, 2013. "Product Quality, Informality, and Child Labor," Review of Development Economics, Wiley Blackwell, vol. 17(2), pages 268-283, 05.
  11. repec:laf:wpaper:201102 is not listed on IDEAS
  12. Donado, Alejandro & Wälde, Klaus, 2012. "Globalization, trade unions and labour standards in the North," ILO Working Papers 469448, International Labour Organization.
  13. Irving Rosales, 2013. "Learn, sweat or steal: a theory of development and the activity of children," Working Papers 0613, Universidad Iberoamericana, Department of Economics.

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