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Poverty alleviation programs, FDI-led growth and child labour under agricultural dualism

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  • Dwibedi, Jayanta
  • Chaudhuri, Sarbajit

Abstract

The paper is aimed at providing a theoretical explanation why policies that affect only the supply side of the child labour problem may not be able to mitigate the incidence of child labour in a developing economy in terms of a three-sector general equilibrium model with agricultural dualism and child labour. Although a poverty alleviation program like subsidization of backward agriculture exerts a downward pressure on the child labour incidence through the supply side by raising adult wage income it ultimately worsens the problem by increasing the demand for child labour resulting from an expansion of backward agriculture. The paper finds that a policy of overall economic growth in the form of an FDI (foreign direct investment) is indeed able to put downward pressures on the child labour problem both through the demand and supply sides. Welfare of the child labour-supplying families also improves consequently.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 29997.

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Date of creation: 28 Feb 2011
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Handle: RePEc:pra:mprapa:29997

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Keywords: Child labour; general equilibrium; agricultural dualism; subsidy policy; poverty alleviation program; capital led growth;

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References

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  1. Chaudhuri, Sarbajit & Yabuuchi, Shigemi, 2007. "Foreign Capital and Skilled-unskilled Wage Inequality in a Developing Economy with Non-traded Goods," MPRA Paper 2645, University Library of Munich, Germany.
  2. Chaudhuri, Sarbajit, 2008. "Fair Wage Hypothesis, Foreign Capital Inflow and Skilled-unskilled Wage Inequality in the Presence of Agricultural Dualism," MPRA Paper 9394, University Library of Munich, Germany.
  3. Sarbajit Chaudhuri & Ujjaini Mukherjee, 2005. "Removal Of Protectionism, Foreign Investment And Welfare In A Model Of Informal Sector," International Trade, EconWPA 0511009, EconWPA.
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  5. Chaudhuri, Sarbajit & Banerjee, Dibyendu, 2010. "FDI in agricultural land, welfare and unemployment in a developing economy," Research in Economics, Elsevier, Elsevier, vol. 64(4), pages 229-239, December.
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  7. Chaudhuri, Sarbajit & Banerjee, Dibyendu, 2007. "Consumption efficiency hypothesis and the HOS model: Some counterintuitive results," MPRA Paper 5325, University Library of Munich, Germany.
  8. Sarbajit Chaudhuri & Ujjaini Mukhopadhyay, 2002. "Economic liberalization and welfare in a model with an informal sector," The Economics of Transition, The European Bank for Reconstruction and Development, The European Bank for Reconstruction and Development, vol. 10(1), pages 143-172, March.
  9. Chaudhuri, Sarbajit & Banerjee, Dibyendu, 2010. "Foreign capital inflow, skilled-unskilled wage inequality and unemployment of unskilled labour in a fair wage model," Economic Modelling, Elsevier, Elsevier, vol. 27(1), pages 477-486, January.
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  16. Chaudhuri, Sarbajit, 2010. "Foreign Direct Investment, Child Labour and Unemployment of Unskilled Labour in a Dual Economy," MPRA Paper 20610, University Library of Munich, Germany.
  17. Saqib Jafarey & Sajal Lahiri, 2001. "Child Labour," World Economics, World Economics, Economic & Financial Publishing, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, World Economics, Economic & Financial Publishing, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 2(1), pages 69-93, January.
  18. Dwibedi, Jayanta & Chaudhuri, Sarbajit, 2007. "Foreign Capital, Return to Education and Child labour," MPRA Paper 2646, University Library of Munich, Germany.
  19. Sarbajit Chaudhuri, 2003. "How and how far to liberalize a developing economy with informal sector and factor market distortions," The Journal of International Trade & Economic Development, Taylor & Francis Journals, Taylor & Francis Journals, vol. 12(4), pages 403-428.
  20. Basu, Kaushik, 2000. "The Intriguing Relation between Adult Minimum Wage and Child Labour," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 110(462), pages C50-61, March.
  21. Sarbajit Chaudhuri & Shigemi Yabuuchi, 2005. "Economic Liberalization And Wage Inequality In The Presence Of Labour Market Imperfection," International Trade, EconWPA 0510008, EconWPA.
  22. Jean-Marie Baland & James A. Robinson, 2000. "Is Child Labor Inefficient?," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 108(4), pages 663-679, August.
  23. Ranjan, Priya, 2001. "Credit constraints and the phenomenon of child labor," Journal of Development Economics, Elsevier, Elsevier, vol. 64(1), pages 81-102, February.
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  25. Chaudhuri, Sarbajit & Yabuuchi, Shigemi, 2010. "Formation of special economic zone, liberalized FDI policy and agricultural productivity," International Review of Economics & Finance, Elsevier, Elsevier, vol. 19(4), pages 779-788, October.
  26. Sarbajit Chaudhuri, 2005. "Tariff Structure In A Small Open Economy: A Theoretical Analysis," International Trade, EconWPA 0511006, EconWPA.
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  31. Chaudhuri, Sarbajit, 2008. "Wage inequality in a dual economy and international mobility of factors: Do factor intensities always matter?," Economic Modelling, Elsevier, Elsevier, vol. 25(6), pages 1155-1164, November.
  32. Hamid Beladi & Sarbajit Chaudhuri & Shigemi Yabuuchi, 2008. "Can International Factor Mobility Reduce Wage Inequality in a Dual Economy?," Review of International Economics, Wiley Blackwell, Wiley Blackwell, vol. 16(5), pages 893-903, November.
  33. Hamid Beladi & Avik Chakrabarti & Sugata Marjit, 2010. "Skilled-Unskilled Wage Inequality And Urban Unemployment," Economic Inquiry, Western Economic Association International, Western Economic Association International, vol. 48(4), pages 997-1007, October.
  34. Sarbajit Chaudhuri & Shigemi Yabuuchi & Ujjaini Mukhopadhyay, 2006. "Inflow Of Foreign Capital And Trade Liberalization In A Model With An Informal Sector And Urban Unemployment," Pacific Economic Review, Wiley Blackwell, Wiley Blackwell, vol. 11(1), pages 87-103, 02.
  35. Chaudhuri, Sarbajit & Mukhopadhyay, Ujjaini, 2006. "Pollution and Informal Sector: A Theoretical Analysis," Journal of Economic Integration, Center for Economic Integration, Sejong University, Center for Economic Integration, Sejong University, vol. 21, pages 363-378.
  36. Sarbajit Chaudhuri, 2005. "Labour Market Distortion, Technology Transfer And Gainful Effects Of Foreign Capital," Manchester School, University of Manchester, University of Manchester, vol. 73(2), pages 214-227, 03.
  37. Chaudhuri, Sarbajit, 2007. "Foreign capital, welfare and urban unemployment in the presence of agricultural dualism," Japan and the World Economy, Elsevier, Elsevier, vol. 19(2), pages 149-165, March.
  38. Chaudhuri, Sarbajit, 2000. "Rural-Urban Migration, the Informal Sector, Urban Unemployment, and Development Policies: A Theoretical Analysis," Review of Development Economics, Wiley Blackwell, Wiley Blackwell, vol. 4(3), pages 353-64, October.
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