The Economics of Child Labor: Comment
In a recent paper, Kaushik Basu and Pham Hoang Van (BV, 1998) develop an important and very interesting model in which a fairly productive economy exhibits multiple equilibria, with children working in at least one. They identify two assumptions as essential to this result. The first - - which they call the "luxury axiom" - - is that a family sends its children to the labor market only if its income from sources other than child labor is very low. The second is embodied in their "substitution axiom" which states that from the point of view of firms, child labor is substitutable for adult labor. In this comment, we show that in addition to these two assumptions about the micro-level behavior of households and firms, there is also an essential macro-level assumption that may be termed the "distribution axiom:" income or wealth from non-labor sources must be sufficiently concentrated in the hands of a few agents. We establish that if non-labor income is distributed with sufficient equality, a market equilibrium with child labor cannot exist in the BV model. Beyond their contribution as an extension of BV's theory, our results formalize a proposition implicit in recent policy discussions of child labor. Christiaan Grootaert and Ravi Kanbur (1995) note that as household-level poverty is well-known to be the major cause of child labor, "[g]eneral economic development, equitably distributed, is the best and most sustainable way of reducing child labor." (p. 198, emphasis added) Policy documents from the International Labor Organization (ILO) have long conveyed this view, and now the World Bank appears to as well (Peter Fallon and Zafiris Tzannatos, 1998). There is a growing recognition that while economic development and development policies are necessary to eliminating child labor, they are not always sufficient on their own. Distributional considerations matter. Indeed, in the case in which BV's model yields multiple equilibria, th
(This abstract was borrowed from another version of this item.)
If 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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 89 (1999)
Issue (Month): 5 (December)
|Contact details of provider:|| Web page: https://www.aeaweb.org/aer/|
More information through EDIRC
|Order Information:||Web: https://www.aeaweb.org/subscribe.html|
References listed on IDEAS
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.:
- 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.
When requesting a correction, please mention this item's handle: RePEc:aea:aecrev:v:89:y:1999:i:5:p:1382-1385. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jane Voros)or (Michael P. Albert)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.