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International Trade and Child Labor: Cross-Country Evidence

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Eric Edmonds
Nina Pavcnik

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Abstract

We explore the relationship between greater exposure to trade (as measured by openness) and child labor in a cross country setting. Our methodology accounts for the fact that trade flows are endogenous to child labor (and labor standards more generally) by examining the relationship between child labor and variation in trade based on geography. We find that countries that trade more have less child labor. At the cross-country means, the data suggest an openness elasticity of child labor of -0.7. For low-income countries, the elasticity of child labor with respect to trade with high income countries is -0.9. However, these relationships appear to be largely attributable to the positive association between trade and income. When we control for the endogeneity of trade and for cross-country income differences, the openness elasticity of child labor at cross-country means is much smaller (-0.1) and statistically insignificant. We consistently find a negative but statistically insignificant association between openness and child labor conditional on cross-country income differences when we split the sample into different country groups, consider only trade between high and low income countries, or focus on exports of unskilled-labor intensive products from low income countries. Thus, the cross-country data do not substantiate assertions that trade per se plays a significant role in perpetuating the high levels of child labor that pervade low-income countries.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 10317.

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Date of creation: Feb 2004
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Handle: RePEc:nbr:nberwo:10317

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F14 - International Economics - - Trade - - - Country and Industry Studies of Trade
F15 - International Economics - - Trade - - - Economic Integration

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  1. Joshua D. Angrist & Adriana Kugler, 2005. "Rural Windfall or a New Resource Curse? Coca, Income, and Civil Conflict in Colombia," NBER Working Papers 11219, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  2. Euclides Pedrozo, 2007. "Uma Avaliação Ex-Ante Dos Impactos Do Bolsa Família Na Redução Do Trabalho Infantil," Anais do XXXV Encontro Nacional de Economia [Proceedings of the 35th Brazilian Economics Meeting] 002, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics]. [Downloadable!]
  3. Krisztina Kis-Katos & Robert Sparrow, 2009. "Child work and schooling under trade liberalization in Indonesia," Discussion Paper Series 8, Department of International Economic Policy, University of Freiburg, revised Mar 2009. [Downloadable!]
  4. Dwibedi, Jayanta & Chaudhuri, Sarbajit, 2007. "Globalization, consumerism and child labour," MPRA Paper 4370, University Library of Munich, Germany. [Downloadable!]
  5. Ronald B. Davies & Annie Voy, 2006. "The Effect of FDI on Child Labor," University of Oregon Economics Department Working Papers 2007-4, University of Oregon Economics Department, revised 01 Feb 2007. [Downloadable!]
    Other versions:
  6. Eric Edmonds, 2007. "Trade Adjustment and Human Capital Investments: Evidence from Indian Tariff Reform," Working Papers id:999, esocialsciences.com. [Downloadable!]
  7. Pinelopi K. Goldberg & Nina Pavcnik, 2004. "Trade, Inequality, and Poverty: What Do We Know? Evidence from Recent Trade Liberalization Episodes in Developing Countries," NBER Working Papers 10593, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  8. Jones, Nicola & Nguyen, Ngoc Anh & Nguyen, Thu Hang, 2007. "Trade liberalisation and intra-household poverty in Vietnam: a q2 social impact analysis," MPRA Paper 4206, University Library of Munich, Germany. [Downloadable!]
  9. Edmonds, Eric V & Pavcnik, Nina & Topalova, Petia, 2008. "Trade Adjustment and Human Capital Investments: Evidence from Indian Tariff Reform," CEPR Discussion Papers 6772, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  10. Bandyopadhyay, Subhayu & Bandyopadhyay, Sudeshna C., 2005. "Trade and Child Labor: A General Equilibrium Analysis," IZA Discussion Papers 1514, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  11. Ponczek, Vladimir & Portela, André, 2007. "The Causal Effect of Family Size on Child Labor and Education," Textos para discussão 162, Escola de Economia de São Paulo, Getulio Vargas Foundation (Brazil). [Downloadable!]
  12. Nguyen, Anh & Jones, Nicola, 2006. "Vietnam’s Trade Liberalisation: Potential Impacts on Child Well-being," MPRA Paper 1385, University Library of Munich, Germany. [Downloadable!]
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