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Origins and Consequences of Child Labour Restrictions: A Macroeconomic Perspective

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  • Doepke, Matthias
  • Krueger, Dirk

Abstract

In this paper we investigate the positive and normative consequences of child-labour restrictions for economic aggregates and welfare. We argue that even though the laissez-faire equilibrium may be inefficient, there are usually better policies to cure these inefficiencies than the imposition of a child-labour ban. Given this finding, we investigate the potential political-economic reasons behind the emergence and persistence of child-labour legislation. Our investigation is based on a structural dynamic general equilibrium model that provides a coherent and uniform framework for our analysis.

Suggested Citation

  • Doepke, Matthias & Krueger, Dirk, 2006. "Origins and Consequences of Child Labour Restrictions: A Macroeconomic Perspective," CEPR Discussion Papers 5953, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:5953
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    References listed on IDEAS

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    1. Eric V. Edmonds & Nina Pavcnik, 2005. "Child Labor in the Global Economy," Journal of Economic Perspectives, American Economic Association, vol. 19(1), pages 199-220, Winter.
    2. R. Myerson., 2010. "Nash Equilibrium and the History of Economic Theory," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 6.
    3. Dirk Krueger & Jessica Tjornhom Donohue, 2007. "On The Distributional Consequences Of Child Labor Legislation," Working Papers id:975, eSocialSciences.
    4. Matthias Doepke, 2004. "Accounting for Fertility Decline During the Transition to Growth," Journal of Economic Growth, Springer, vol. 9(3), pages 347-383, September.
    5. Ranjan, Priya, 2001. "Credit constraints and the phenomenon of child labor," Journal of Development Economics, Elsevier, pages 81-102.
    6. Matthias Doepke & Fabrizio Zilibotti, 2005. "The Macroeconomics of Child Labor Regulation," American Economic Review, American Economic Association, pages 1492-1524.
    7. 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.
    8. Greenwood, J. & Rogerson, R. & Wright, R., 1993. "Household Production in Real Business Cycle Thoery," RCER Working Papers 347, University of Rochester - Center for Economic Research (RCER).
    9. Pallage, Stephane & Zimmermann, Christian, 2007. "Buying out child labor," Journal of Macroeconomics, Elsevier, pages 75-90.
    10. Pallage, Stephane & Zimmermann, Christian, 2007. "Buying out child labor," Journal of Macroeconomics, Elsevier, pages 75-90.
    11. Moshe Hazan & Binyamin Berdugo, 2002. "Child Labour, Fertility, and Economic Growth," Economic Journal, Royal Economic Society, vol. 112(482), pages 810-828, October.
    12. Drusilla K. Brown & Alan V. Deardorff & Robert M Stern, 2001. "Child Labor: Theory, Evidence, and Policy," Working Papers 474, Research Seminar in International Economics, University of Michigan.
    13. Dessy, Sylvain E. & Pallage, Stephane, 2001. "Child labor and coordination failures," Journal of Development Economics, Elsevier, pages 469-476.
    14. Basu, Kaushik & Van, Pham Hoang, 1998. "The Economics of Child Labor," American Economic Review, American Economic Association, pages 412-427.
    15. Patrick J. Kehoe & Ellen R. McGrattan, 2005. "Sudden Stops and Output Drops," American Economic Review, American Economic Association, pages 381-387.
    16. 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.
    17. Dessy, Sylvain & Knowles, John, 2008. "Why is child labor illegal?," European Economic Review, Elsevier, vol. 52(7), pages 1275-1311, October.
    18. Kaushik Basu, 1999. "Child Labor: Cause, Consequence, and Cure, with Remarks on International Labor Standards," Journal of Economic Literature, American Economic Association, pages 1083-1119.
    19. Dessy, Sylvain E. & Pallage, Stephane, 2001. "Child labor and coordination failures," Journal of Development Economics, Elsevier, pages 469-476.
    20. Stephen L. Parente & Richard Rogerson & Randall Wright, 2000. "Homework in Development Economics: Household Production and the Wealth of Nations," Journal of Political Economy, University of Chicago Press, vol. 108(4), pages 680-687, August.
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    Citations

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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, pages 63-79.
    3. Matthias Doepke, 2007. "The Research Agenda: Matthias Doepke on the Transition from Stagnation to Growth," EconomicDynamics Newsletter, Review of Economic Dynamics, vol. 8(2), April.
    4. Dessy, Sylvain & Knowles, John, 2008. "Why is child labor illegal?," European Economic Review, Elsevier, vol. 52(7), pages 1275-1311, October.
    5. Simone D’Alessandro & Tamara Fioroni, 2016. "Child labour and inequality," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, pages 63-79.
    6. Matthias Doepke & Fabrizio Zilibotti, 2009. "International Labor Standards and the Political Economy of Child-Labor Regulation," Journal of the European Economic Association, MIT Press, vol. 7(2-3), pages 508-518, 04-05.
    7. Doepke, Matthias, 2013. "Exploitation, Altruism, and Social Welfare: An Economic Exploration," CEPR Discussion Papers 9509, C.E.P.R. Discussion Papers.

    More about this item

    Keywords

    child labour; inequality; political economy; welfare;

    JEL classification:

    • J40 - Labor and Demographic Economics - - Particular Labor Markets - - - General
    • J82 - Labor and Demographic Economics - - Labor Standards - - - Labor Force Composition
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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