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Nutritional efficiency wages and child labor

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  • Estevez, Kristian

Abstract

This paper formally analyzes the incidence of child labor by employing an overlapping-generations general-equilibrium model of a small open economy. An individual's ability determines whether or not he/she becomes a skilled worker. The supply side of the economy is composed of two sectors: a modern sector that produces a homogeneous good using skilled labor and physical capital; and an agrarian sector that produces a traditional good using unskilled adult labor, child labor, and land. An increase in foreign direct investment and improvements in education reduce the incidence of child labor. Emigration of skilled (unskilled) workers reduces (raises) the supply of child labor, while trade sanctions reduce the demand for child labor. Child wage subsidies have an ambiguous effect on the incidence of child labor while education subsidies are effective in reducing the incidence of child labor. Simulation analysis is used to investigate the welfare effects of the aforementioned policies.

Suggested Citation

  • Estevez, Kristian, 2011. "Nutritional efficiency wages and child labor," Economic Modelling, Elsevier, vol. 28(4), pages 1793-1801, July.
  • Handle: RePEc:eee:ecmode:v:28:y:2011:i:4:p:1793-1801
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    References listed on IDEAS

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    1. Gupta, Manash Ranjan, 2000. "Wage Determination of a Child Worker: A Theoretical Analysis," Review of Development Economics, Wiley Blackwell, vol. 4(2), pages 219-228, June.
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    5. Ranjan, Priya, 2001. "Credit constraints and the phenomenon of child labor," Journal of Development Economics, Elsevier, pages 81-102.
    6. Kruger, Diana I., 2007. "Coffee production effects on child labor and schooling in rural Brazil," Journal of Development Economics, Elsevier, vol. 82(2), pages 448-463, March.
    7. Ravallion, Martin & Wodon, Quentin, 2000. "Does Child Labour Displace Schooling? Evidence on Behavioural Responses to an Enrollment Subsidy," Economic Journal, Royal Economic Society, vol. 110(462), pages 158-175, March.
    8. Paul Schultz, T., 2004. "School subsidies for the poor: evaluating the Mexican Progresa poverty program," Journal of Development Economics, Elsevier, pages 199-250.
    9. 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.
    10. Elias Dinopoulos & Laixun Zhao, 2007. "Child Labor and Globalization," Journal of Labor Economics, University of Chicago Press, vol. 25, pages 553-579.
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