Trade and Child Labor: A General Equilibrium Analysis
AbstractThis paper augments the existing literature on trade and child labor by exploring the effects of terms of trade changes in the context of a three good general equilibrium model, where one of the goods is a non-traded good. We find that under quasi-linear preferences the effect of the terms of trade on child labor depends critically on the pattern of substitutability (or complementarity) in the excess demand functions between the export good and the non-traded good. We extend the analysis to the case of homothetic preferences and find that the basic result is somewhat modified in a context where the marginal utility of income is affected by the terms of trade. We also extend the analysis to the case where factors move freely between the three goods as in a Heckscher-Ohlin type framework. Finally, we show that a balanced budget policy of taxing the education of skilled families and subsidizing the education of unskilled families must reduce child labor without any impact on aggregate welfare.
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Bibliographic InfoPaper provided by Department of Economics, West Virginia University in its series Working Papers with number 05-03 Classification- JEL: F1, O19.
Length: 28 pages
Date of creation: 2005
Date of revision:
Child Labor; Non-traded Goods; Substitutability or Complementarity; Terms of Trade.;
Other versions of this item:
- Subhayu Bandyopadhyay & Sudeshna C. Bandyopadhyay, 2009. "Trade and Child Labor: A General Equilibrium Analysis," Emerging Markets Finance and Trade, M.E. Sharpe, Inc., vol. 45(1), pages 5-18, January.
- 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).
- Subhayu Bandyopadhyay & Sudeshna C. Bandyopadhyay, 2007. "Trade and child labor: a general equilibrium analysis," Working Papers 2007-024, Federal Reserve Bank of St. Louis.
- F1 - International Economics - - Trade
- O19 - Economic Development, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-05-14 (All new papers)
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.:
- Jean-Marie Baland & James A. Robinson, 2000. "Is Child Labor Inefficient?," Journal of Political Economy, University of Chicago Press, vol. 108(4), pages 663-679, August.
- Edmonds, Eric V. & Pavcnik, Nina, 2005. "The effect of trade liberalization on child labor," Journal of International Economics, Elsevier, vol. 65(2), pages 401-419, March.
- Edmonds, Eric V. & Pavcnik, Nina, 2006.
"International trade and child labor: Cross-country evidence,"
Journal of International Economics,
Elsevier, vol. 68(1), pages 115-140, January.
- Edmonds, Eric V & Pavcnik, Nina, 2004. "International Trade and Child Labour: Cross-Country Evidence," CEPR Discussion Papers 4309, C.E.P.R. Discussion Papers.
- Eric Edmonds & Nina Pavcnik, 2004. "International Trade and Child Labor: Cross-Country Evidence," NBER Working Papers 10317, National Bureau of Economic Research, Inc.
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