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Exploitation, Altruism, and Social Welfare: An Economic Exploration

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  • Doepke, Matthias

Abstract

Child labor is often condemned as a form of exploitation. I explore how the notion of exploitation, as used in everyday language, can be made precise in economic models of child labor. Exploitation is defined relative to a specific social welfare function. I first show that under the standard dynastic social welfare function, which is commonly applied to intergenerational models, child labor is never exploitative. In contrast, under an inclusive welfare function, which places additional weight on the welfare of children, child labor is always exploitative. Neither welfare function captures the more gradual distinctions that common usage of the term exploitation allows. I resolve this conflict by introducing a welfare function with minimum altruism, in which child labor in a given family is judged relative to a specific social standard. Under this criterion, child labor is exploitative only in families where the parent (or guardian) displays insufficient altruism towards the child. I argue that this welfare function best captures the conventional concept of exploitation and has useful properties for informing political choices regarding child labor.

Suggested Citation

  • Doepke, Matthias, 2013. "Exploitation, Altruism, and Social Welfare: An Economic Exploration," CEPR Discussion Papers 9509, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:9509
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    References listed on IDEAS

    as
    1. 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.
    2. Barro, Robert J, 1974. "Are Government Bonds Net Wealth?," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1095-1117, Nov.-Dec..
    3. Matthias Doepke, 2004. "Accounting for Fertility Decline During the Transition to Growth," Journal of Economic Growth, Springer, vol. 9(3), pages 347-383, September.
    4. Kimball, Miles S., 1987. "Making sense of two-sided altruism," Journal of Monetary Economics, Elsevier, vol. 20(2), pages 301-326, September.
    5. Schoonbroodt, Alice & Tertilt, Michèle, 2014. "Property rights and efficiency in OLG models with endogenous fertility," Journal of Economic Theory, Elsevier, vol. 150(C), pages 551-582.
    6. Matthias Doepke, "undated". "Origins and Consequences of Child Labor Restrictions: A Macroeconomic Perspective," UCLA Economics Online Papers 413, UCLA Department of Economics.
    7. B. Douglas Bernheim, 1989. "Intergenerational Altruism, Dynastic Equilibria and Social Welfare," Review of Economic Studies, Oxford University Press, vol. 56(1), pages 119-128.
    8. Barro, Robert J & Becker, Gary S, 1989. "Fertility Choice in a Model of Economic Growth," Econometrica, Econometric Society, vol. 57(2), pages 481-501, March.
    9. Matthias Doepke & Michèle Tertilt, 2009. "Women's Liberation: What's in It for Men?," The Quarterly Journal of Economics, Oxford University Press, vol. 124(4), pages 1541-1591.
    10. Horrell Sara & Humphries Jane, 1995. "The Exploitation of Little Children: Child Labor and the Family Economy in the Industrial Revolution," Explorations in Economic History, Elsevier, vol. 32(4), pages 485-516, October.
    11. de la Croix,David & Michel,Philippe, 2002. "A Theory of Economic Growth," Cambridge Books, Cambridge University Press, number 9780521001151, August.
    12. 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.
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    More about this item

    Keywords

    altruism; child labor; exploitation; social welfare function;

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • J47 - Labor and Demographic Economics - - Particular Labor Markets - - - Coercive Labor Markets
    • J80 - Labor and Demographic Economics - - Labor Standards - - - General

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