Child Labor and Coordination Failures
In this paper, we show how coordination failures may explain the prevalence of child labor in developing countries. We do so within a simple game-theoretic setup. Child labor arises in our environment because of the lack of a coordination mechanism between parental decisions to invest in the human capital of their children and firm's decisions to invest in skill-intensive technology. Governmental policies that help coordinate expectations lead to the disappearance of child labor.
|Date of creation:||Mar 2000|
|Publication status:||published (latest version) in Journal of Development Economics, 65/2, June 2001, 469-476|
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