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The Luxury Axiom, The Wealth Paradox, And Child Labor

  • C. Simon Fan


    (Department of Economics, Lingnan University)

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    Basu and Van (1998) present a fundamental framework of child labor with two important axioms: the luxury axiom and the substitution axiom. A number of empirical studies, however, reveal a ¡°wealth paradox¡±. The current paper has two aims. First, it develops a model that provides an explanation for ¡°the wealth paradox¡± in light of the luxury axiom and the substitution axiom. Second, it helps understand the relationship between the luxury axiom and the substitution axiom.

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    Article provided by Chung-Ang Unviersity, Department of Economics in its journal Journal Of Economic Development.

    Volume (Year): 36 (2011)
    Issue (Month): 3 (September)
    Pages: 25-45

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    Handle: RePEc:jed:journl:v:36:y:2011:i:3:p:25-45
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    1. Uma Kambhampati & Raji Rajan, 2004. "Economic Growth: A Panacea for Child Labour?," Economics & Management Discussion Papers em-dp2004-12, Henley Business School, Reading University.
    2. 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.
    3. Cheolsung Park, 2010. "Children¡¯S Health Gradient In Developing Countries: Evidence From Indonesia," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 35(4), pages 25-44, December.
    4. Bhalotra, Sonia & Heady, Christopher, 2001. "Child farm labour : the wealth paradox," Social Protection Discussion Papers 24088, The World Bank.
    5. David N. Weil, 2005. "Accounting for the Effect of Health on Economic Growth," NBER Working Papers 11455, National Bureau of Economic Research, Inc.
    6. Ranjan, P., 1999. ""Credit Constraints and the Phenomenon of Child Labor"," Papers 98-99-12, California Irvine - School of Social Sciences.
    7. Basu, Kaushik & Das, Sanghamitra & Dutta, Bhaskar, 2007. "Child Labor and Household Wealth: Theory and Empirical Evidence of an Inverted-U," Working Papers 07-02, Cornell University, Center for Analytic Economics.
    8. Hunt, E. H., 1986. "Industrialization and Regional Inequality: Wages in Britain, 1760–1914," The Journal of Economic History, Cambridge University Press, vol. 46(04), pages 935-966, December.
    9. 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.
    10. Christelle Dumas, 2007. "Why do parents make their children work? A test of the poverty hypothesis in rural areas of Burkina Faso," Oxford Economic Papers, Oxford University Press, vol. 59(2), pages 301-329, April.
    11. Alessandro Cigno, 2009. "The Economics of Child Labour," Chapters, in: Labor and Employment Law and Economics, chapter 14 Edward Elgar.
    12. Atheendar S. Venkataramani & K.R. Shanmugam & Jennifer Prah Ruger, 2010. "Health, Technical Efficiency, And Agricultural Production In Indian Districts," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 35(4), pages 1-23, December.
    13. Matthias Doepke & Fabrizio Zilibotti, 2005. "The macroeconomics of child labor regulation," Staff Report 354, Federal Reserve Bank of Minneapolis.
    14. Talia Bar & Kaushik Basu, 2009. "Children, Education, Labor, and Land: In The Long Run and Short Run," Journal of the European Economic Association, MIT Press, vol. 7(2-3), pages 487-497, 04-05.
    15. Horrell, Sara & Humphries, Jane & Voth, Hans-Joachim, 2001. "Destined for Deprivation: Human Capital Formation and Intergenerational Poverty in Nineteenth-Century England," Explorations in Economic History, Elsevier, vol. 38(3), pages 339-365, July.
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