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On The Distributional Consequences Of Child Labor Legislation

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  • Dirk Krueger
  • Jessica Tjornhom Donohue

Abstract

This article studies the effects of child labor legislation on human capital accumulation and the distribution of wealth and welfare. We calibrate our model to U.S. data circa 1880 and find that the consequences of restricting child labor or providing tax-financed education depend on the main source of individual household income. Households with significant financial assets unambiguously lose from government intervention, whereas high-wage workers benefit most from a child labor ban, and low-wage workers benefit most from free education. Introducing free education results in substantial welfare gains, whereas a child labor ban induces small welfare losses. Copyright 2005 by the Economics Department Of The University Of Pennsylvania And Osaka University Institute Of Social And Economic Research Association.

Suggested Citation

  • Dirk Krueger & Jessica Tjornhom Donohue, 2005. "On The Distributional Consequences Of Child Labor Legislation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 46(3), pages 785-815, August.
    • Handle: RePEc:ier:iecrev:v:46:y:2005:i:3:p:785-815
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    Cited by:

    1. 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.
    2. Simone D’Alessandro & Tamara Fioroni, 2016. "Child labour and inequality," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 14(1), pages 63-79, March.
    3. Matthias Doepke & Fabrizio Zilibotti, 2005. "The Macroeconomics of Child Labor Regulation," American Economic Review, American Economic Association, vol. 95(5), pages 1492-1524, December.
    4. Matthias Doepke, "undated". "Origins and Consequences of Child Labor Restrictions: A Macroeconomic Perspective," UCLA Economics Online Papers 413, UCLA Department of Economics.
    5. Kitaura, Koji, 2009. "Child labor, education aid, and economic growth," Journal of Macroeconomics, Elsevier, vol. 31(4), pages 614-620, December.
    6. Alejandro Donado & Klaus Wälde, 2008. "Trade Unions Go Global!," CESifo Working Paper Series 2368, CESifo.
    7. Chakraborty, Kamalika & Chakraborty, Bidisha, 2018. "Endogenous Altruism, Learning by Doing Effect and Impact of Domestic Policies on Child Labour," MPRA Paper 89229, University Library of Munich, Germany.
    8. Jorge Soares, 2010. "Welfare Impact Of A Ban On Child Labor," Economic Inquiry, Western Economic Association International, vol. 48(4), pages 1048-1064, October.
    9. Bell, Clive & Gersbach, Hans, 2009. "Child Labor And The Education Of A Society," Macroeconomic Dynamics, Cambridge University Press, vol. 13(2), pages 220-249, April.
    10. Elisabeth Caucutt & Krishna B. Kumar, 2007. "Education For All: A Welfare-Improving Course for Africa?," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 10(2), pages 294-326, April.
    11. Chakraborty, Kamalika & Chakraborty, Bidisha, 2016. "Learning by doing, low level equilibrium trap, and effect of domestic policies on child labour," MPRA Paper 74712, University Library of Munich, Germany.
    12. Chakraborty, Kamalika & Chakraborty, Bidisha, 2016. "Child labour ban versus Education subsidy in a model with learning by doing effect in unskilled work," MPRA Paper 74203, University Library of Munich, Germany.
    13. Michele Di Maio & Giorgio Fabbri, 2013. "Consumer boycott, household heterogeneity, and child labor," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(4), pages 1609-1630, October.
    14. Gianni Toniolo & Giovanni Vecchi, 2007. "Italian Children at Work, 1881-1961," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 66(3), pages 401-427, November.
    15. Kaushik Basu & Homa Zarghamee, 2008. "Product boycott a good idea for controlling child labor? A theoretical investigation," Discussion Papers 08-09, Indian Statistical Institute, Delhi.
    16. Francisco Gonzalez & Irving Rosales, 2016. "The case against child labor bans," Working Papers 1601, University of Waterloo, Department of Economics, revised Jan 2016.
    17. L.Guarcello & S.Lyon & F.Rosati & C. Valdivia, 2005. "Towards statistical standards for children’s non economic work: A discussion based on household survey data," UCW Working Paper 16, Understanding Children's Work (UCW Programme).
    18. Alejandro Donado & Klaus Wa¨lde, 2012. "How trade unions increase welfare," Economic Journal, Royal Economic Society, vol. 122(563), pages 990-1009, September.
    19. Mazzutti, Caio Cícero Toledo Piza da Costa, 2016. "Three essays on the causal impacts of child labour laws in Brazil," Economics PhD Theses 0616, Department of Economics, University of Sussex Business School.
    20. Chesnokova Tatyana & Vaithianathan Rhema, 2008. "Lucky Last? Intra-Sibling Allocation of Child Labor," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 8(1), pages 1-30, July.
    21. 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.
    22. Krisztina Kis‐Katos & Günther G. Schulze, 2005. "Regulation Of Child Labour," Economic Affairs, Wiley Blackwell, vol. 25(3), pages 24-30, September.

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    More about this item

    JEL classification:

    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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