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Endogenous Technical Progress and the Emergence of Child Labor Laws

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  • Dessy, Sylvain E.

Abstract

I develop a theory of technical progress that uncovers sufficient conditions for opposition to the adoption of child labor laws to disappear over time. The supply of child labor comes exclusively from unskilled parents, because of their inability to help their children benefit from formal education, while its demand originates from capitalists-the firms' owners. Because child labor crowds out adult employment, there are always social pressures to ban it. However, such pressures are met by capitalists' opposition. Capitalist oppose the adoption of a ban on child labor because such a ban reduces opportunities for earning a high return on capital. Technical progress, induced by skill accumulation, improves the earning prospects of firms hiring adult workers only, while it reduces those of firms hiring children only. As a result, more capitalists are drawn into the adult labor market, and industrial opposition to a ban on child labor eventually vanishes over time. Provided child labor exhibits skill-enhancing learning-by-doing, policy action to speed up the emergence of child labor laws should therefore focus on education reforms that raise the quality of education school-goers receive, and on political reforms that raise the cost of lobbying legislators against adopting a ban on child labor. However, in countries where child labor provides little or no opportunities for learning-by-doing, no law will emerge unless appropriately targeted poverty alleviation mechanisms are designed, in order to induce unskilled parents to allocate a positive fraction of child's time to schooling.

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Paper provided by Université Laval - Département d'économique in its series Cahiers de recherche with number 0302.

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Date of creation: 2003
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Handle: RePEc:lvl:laeccr:0302

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Keywords: Child labor; Learning-by-doing; Education; Technical progress; Lobbying cost; Voting equilibrium;

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  1. Matthias Doepke, 2004. "Accounting for Fertility Decline During the Transition to Growth," Journal of Economic Growth, Springer, vol. 9(3), pages 347-383, 09.
  2. Anker, Richard, 2000. "Conceptual and research frameworks for the economics of child labour and its elimination," ILO Working Papers 346752, International Labour Organization.
  3. Glomm, Gerhard, 1997. "Parental choice of human capital investment," Journal of Development Economics, Elsevier, vol. 53(1), pages 99-114, June.
  4. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
  5. Moehling, Carolyn M., 1999. "State Child Labor Laws and the Decline of Child Labor," Explorations in Economic History, Elsevier, vol. 36(1), pages 72-106, January.
  6. Ranjan, P., 1999. ""Credit Constraints and the Phenomenon of Child Labor"," Papers 98-99-12, California Irvine - School of Social Sciences.
  7. Michael Kremer & Daniel Chen, 2000. "Income-distribution Dynamics with Endogenous Fertility," NBER Working Papers 7530, National Bureau of Economic Research, Inc.
  8. 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.
  9. Dessy, Sylvain E., 2000. "A defense of compulsive measures against child labor," Journal of Development Economics, Elsevier, vol. 62(1), pages 261-275, June.
  10. Basu, Kaushik & Van, Pham Hoang, 1998. "The Economics of Child Labor," American Economic Review, American Economic Association, vol. 88(3), pages 412-27, June.
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