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Child Labor and Resistance to Change

  • Giorgio Bellettini

    (University of Bologna)

  • Carlotta Berti Ceroni

    (University of Bologna)

  • Gianmarco I.P. Ottaviano

    (University of Bologna and CEPR)

We study the interactions between technological innovation, investment in human capital and child labor. In our setting new technologies require new skills and new skills can be developed only through schooling. In a two-stage game, first firms decide on innovation, then households decide on education. In equilibrium the presence of inefficient child labor depends on parameters related to technology, parents’ altruism and the diffusion of firm property. When child labor exists, it is due to either firms reluctance to innovate or households’ unwillingness to educate or both. The optimal policy to eliminate child labor depends crucially on its underlying cause. We show that, in some cases, compulsory schooling laws or a ban on child labor are welfare reducing, while a subsidy to innovation is the right tool to eliminate child labor and increase welfare.

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Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2003.79.

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Date of creation: Sep 2003
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Handle: RePEc:fem:femwpa:2003.79
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  1. Levy, Victor, 1985. "Cropping Pattern, Mechanization, Child Labor, and Fertility Behavior in a Farming Economy: Rural Egypt," Economic Development and Cultural Change, University of Chicago Press, vol. 33(4), pages 777-91, July.
  2. Cigno, Alessandro & Rosati, Furio C., 2000. "Why do Indian Children Work, and is it Bad for Them?," IZA Discussion Papers 115, Institute for the Study of Labor (IZA).
  3. G. Bellettini & C. Berti Ceroni, 2000. "Compulsory schooling laws and the cure against child labor," Working Papers 394, Dipartimento Scienze Economiche, Universita' di Bologna.
  4. Galor, Oded & Moav, Omer, 2001. "Das Human Kapital," CEPR Discussion Papers 2701, C.E.P.R. Discussion Papers.
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  7. Ranjan, P., 1999. ""Credit Constraints and the Phenomenon of Child Labor"," Papers 98-99-12, California Irvine - School of Social Sciences.
  8. Basu, Kaushik, 1998. "Child labor : cause, consequence, and cure, with remarks on International Labor Standards," Policy Research Working Paper Series 2027, The World Bank.
  9. Sylvain Dessy & Stephane Pallage, 2000. "Child Labor and Coordination Failures," Cahiers de recherche CREFE / CREFE Working Papers 109, CREFE, Université du Québec à Montréal.
  10. Giorgio Bellettini & Carlotta Berti Ceroni, 2004. "Compulsory Schooling Laws and the Cure for Child Labour," Bulletin of Economic Research, Wiley Blackwell, vol. 56(3), pages 227-239, 07.
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  12. Kenneth A. Swinnerton & Carol Ann Rogers, 1999. "The Economics of Child Labor: Comment," Labor and Demography 9903002, EconWPA.
  13. Dessy, Sylvain E., 2000. "A defense of compulsive measures against child labor," Journal of Development Economics, Elsevier, vol. 62(1), pages 261-275, June.
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  16. Douglas A. Galbi, 1997. "Child labor and the division of labor in the early English cotton mills," Journal of Population Economics, Springer, vol. 10(4), pages 357-375.
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