Abstinence from Child Labor and Profit Seeking
AbstractSome firms voluntarily abstain from using child labor, presumably in response to concerns about the welfare of overseas child workers. These firms do not, however, support banning the imports of competitors’ products manufactured with child labor. As an explanation of this seemingly contradictory behavior, I consider a setting in which two firms engage in Bertrand competition for consumers who vary in the value they place on goods made without child labor. When the firms differentiate themselves according to their labor input, both enjoy greater profits. If imports using child labor are banned, this reduces the profits of both firms. Similar results can also arise in a many firm setting. If charitable donations to education foundations raise the cost of child labor, this too can arise as a purely profitseeking activity by adult labor firms. Thus, while the adult-labor firms engage in seemingly altruistic behavior, they may do so not out of regard for children but rather for their own profits.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University of Oregon Economics Department in its series University of Oregon Economics Department Working Papers with number 2000-1.
Date of creation: 01 Jul 2000
Date of revision: 01 Aug 2002
Contact details of provider:
Postal: 1285 University of Oregon, 435 PLC, Eugene, OR 97403-1285
Phone: (541) 346-4661
Fax: (541) 346-1243
Web page: http://economics.uoregon.edu/
More information through EDIRC
Child labor; product differentiation;
Other versions of this item:
- L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
- L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
- J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Andrew Caplin & Barry Nalebuff, 1990.
"Aggregation and Imperfect Competition: On the Existence of Equilibrium,"
Cowles Foundation Discussion Papers
937, Cowles Foundation for Research in Economics, Yale University.
- Caplin, Andrew & Nalebuff, Barry, 1991. "Aggregation and Imperfect Competition: On the Existence of Equilibrium," Econometrica, Econometric Society, vol. 59(1), pages 25-59, January.
- Caplin, A. & Nalebuff, B., 1989. "Aggregation And Imperfect Competition: On The Existence Of Equilibrium," Discussion Papers 1989_30, Columbia University, Department of Economics.
- Chiu, W Henry, 1998. "Income Inequality, Human Capital Accumulation and Economic Performance," Economic Journal, Royal Economic Society, vol. 108(446), pages 44-59, January.
- Rogers Carol Ann & Swinnerton Kenneth A, 2005.
"A Theory of Exploitative Child Labor,"
Labor and Demography
- Carol Rogers & Kenneth A. Swinnerton, 2002. "A Theory of Exploitative Child Labor," Working Papers gueconwpa~02-02-03, Georgetown University, Department of Economics.
- Carol Ann Rogers & Kenneth A. Swinnerton, 2003. "A Theory of Exploitative Child Labor," Development and Comp Systems 0306005, EconWPA.
- Galor, Oded & Zeira, Joseph, 1988.
"Income Distribution and Macroeconomics,"
51644, University Library of Munich, Germany, revised 01 Sep 1989.
- Kimberly Ann Elliott & Richard B. Freeman, 2003. "Can Labor Standards Improve under Globalization?," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 338.
- Basu, Kaushik, 1998.
"Child labor : cause, consequence, and cure, with remarks on International Labor Standards,"
Policy Research Working Paper Series
2027, The World Bank.
- Kaushik Basu, 1999. "Child Labor: Cause, Consequence, and Cure, with Remarks on International Labor Standards," Journal of Economic Literature, American Economic Association, vol. 37(3), pages 1083-1119, September.
- Ranjan, P., 1999.
""Credit Constraints and the Phenomenon of Child Labor","
98-99-12, California Irvine - School of Social Sciences.
- Ranjan, Priya, 2001. "Credit constraints and the phenomenon of child labor," Journal of Development Economics, Elsevier, vol. 64(1), pages 81-102, February.
- Helmut Bester, 1998. "Quality Uncertainty Mitigates Product Differentiation," RAND Journal of Economics, The RAND Corporation, vol. 29(4), pages 828-844, Winter.
- Maskus, Keith E., 1997. "Should core labor standards be imposed through international trade policy?," Policy Research Working Paper Series 1817, The World Bank.
- Degryse, Hans, 1996.
"On the Interaction between Vertical and Horizontal Product Differentiation: An Application to Banking,"
Journal of Industrial Economics,
Wiley Blackwell, vol. 44(2), pages 169-86, June.
- Degryse, H.A., 1996. "On the interaction between vertical and horizontal product differentiation: An application to banking," Open Access publications from Tilburg University urn:nbn:nl:ui:12-72562, Tilburg University.
- Basu, Kaushik & Van, Pham Hoang, 1998. "The Economics of Child Labor," American Economic Review, American Economic Association, vol. 88(3), pages 412-27, June.
- Andreoni, James, 1990. "Impure Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving?," Economic Journal, Royal Economic Society, vol. 100(401), pages 464-77, June.
- Edmonds, Eric V., 2007.
IZA Discussion Papers
2606, Institute for the Study of Labor (IZA).
- Etilé, Fabrice & Teyssier, Sabrina, 2013.
"Corporate social responsibility and the economics of consumer social responsibility,"
Revue d'Etudes en Agriculture et Environnement,
Editions NecPlus, vol. 2013(02), pages 221-259, June.
- Fabrice Etilé & Sabrina Teyssier, 2013. "Corporate social responsibility and the economics of consumer social responsibility," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement, INRA Department of Economics, vol. 94(2), pages 221-259.
- Etilé, Fabrice & Teyssier, Sabrina, 2013. "Corporate social responsibility and the economics of consumer social responsibility," Revue d'Etudes en Agriculture et Environnement, Editions NecPlus, vol. 94(02), pages 221-259, June.
- Fabrice Etilé & Sabrina Teyssier, 2012. "Corporate Social Responsibility and the Economics of Consumer Social Responsibility," Working Papers hal-00749355, HAL.
- Fanelli, Domenico, 2010. "The Role of Socially Concerned Consumers in the Coexistence of Ethical and Standard Firms," MPRA Paper 20117, University Library of Munich, Germany.
- Baland, Jean-Marie & Duprez, Cédric, 2009. "Are labels effective against child labor?," Journal of Public Economics, Elsevier, vol. 93(11-12), pages 1125-1130, December.
- Matthias Doepke & Fabrizio Zilibotti, 2009.
"Do International Labor Standards Contribute to the Persistence of the Child Labor Problem?,"
NBER Working Papers
15050, National Bureau of Economic Research, Inc.
- Matthias Doepke & Fabrizio Zilibotti, 2010. "Do international labor standards contribute to the persistence of the child-labor problem?," Journal of Economic Growth, Springer, vol. 15(1), pages 1-31, March.
- Doepke, Matthias & Zilibotti, Fabrizio, 2009. "Do International Labor Standards Contribute to the Persistence of the Child Labor Problem?," IZA Discussion Papers 4214, Institute for the Study of Labor (IZA).
- Matthias Doepke & Fabrizio Zilibotti, 2010. "Do international labor standards contribute to the persistence of the child labor problem?," IEW - Working Papers 467, Institute for Empirical Research in Economics - University of Zurich.
- Fabrizio Zilibotti & Matthias Doepke, 2009. "Do International Labor Standards Contribute to the Persistence of the Child Labor Problem?," 2009 Meeting Papers 157, Society for Economic Dynamics.
- Fanelli, Domenico, 2008. "A Two-Stage Duopoly Game with Ethical Labeling and Price Competition when Consumers differ in Preferences," MPRA Paper 11544, University Library of Munich, Germany.
- Baland, Jean-Marie & Duprez, Cédric, 2007.
"Are Fair Trade Labels Effective Against Child Labour?,"
CEPR Discussion Papers
6259, C.E.P.R. Discussion Papers.
- Jean Marie Baland & Cedric Duprez, 2008. "Are Fair Trade Labels Effective Against Child Labor?," Working Papers id:1559, eSocialSciences.
- 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.
- 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.
- Liu, Zugang (Leo) & Anderson, Trisha D. & Cruz, Jose M., 2012. "Consumer environmental awareness and competition in two-stage supply chains," European Journal of Operational Research, Elsevier, vol. 218(3), pages 602-613.
- D'Alessandro, Simone & Fanelli, Domenico, 2009. "The Role of Income Distribution in the Diffusion of Corporate Social Responsibility," MPRA Paper 18659, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bill Harbaugh).
If references are entirely missing, you can add them using this form.