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Child work and schooling under trade liberalization in Indonesia

  • Krisztina Kis-Katos
  • Robert Sparrow

    ()

    (Department of International Economic Policy, University of Freiburg)

We examine the effects of trade liberalization on child work and schooling in Indonesia. Our estimation strategy identifies geographical differences in the effects of trade policy through district and province level exposure to reduction in import tariff barriers. We use seven rounds (1993 to 2002) of the Indonesian annual national household survey (Susenas), and relate workforce participation and school enrolment of children aged 10-15 to geographic variation in relative tariff exposure. Our main findings show that increased exposure to trade liberalization is associated with a decrease in child work and an increase in enrolment among 10 to 15 year olds. The effects of tariff reductions are strongest for children from low skill backgrounds and in rural areas. However, a dynamic analysis suggests that these effects reflect the long term benefits of trade liberalization, through economic growth and subsequent income effects, while frictions and negative adjustment effects may occur in the short term.

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File URL: http://www.vwl.uni-freiburg.de/iwipol/REPEC/fre/wpaper/DP8_kis-katos_trade_liberalization.pdf
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Paper provided by Department of International Economic Policy, University of Freiburg in its series Discussion Paper Series with number 8.

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Length: 42 pages
Date of creation: Mar 2009
Date of revision: Mar 2009
Handle: RePEc:fre:wpaper:8
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  1. Eric Edmonds & Nina Pavcnik, 2004. "International Trade and Child Labor: Cross-Country Evidence," NBER Working Papers 10317, National Bureau of Economic Research, Inc.
  2. Mary Amiti & Jozef Konings, 2007. "Trade Liberalization, Intermediate Inputs, and Productivity: Evidence from Indonesia," American Economic Review, American Economic Association, vol. 97(5), pages 1611-1638, December.
  3. Cigno, Alessandro & Rosati, Furio C. & Guarcello, Lorenzo, 2002. "Does Globalisation Increase Child Labour?," IZA Discussion Papers 470, Institute for the Study of Labor (IZA).
  4. Edmonds, Eric V & Pavcnik, Nina & Topalova, Petia, 2008. "Trade Adjustment and Human Capital Investments: Evidence from Indian Tariff Reform," CEPR Discussion Papers 6772, C.E.P.R. Discussion Papers.
  5. Arnold, Jens Matthias & Javorcik, Beata Smarzynska, 2005. "Gifted kids or pushy parents? Foreign acquisitions and plant performance in Indonesia," Policy Research Working Paper Series 3597, The World Bank.
  6. Lisa Cameron, 2001. "The Impact Of The Indonesian Financial Crisis On Children: An Analysis Using The 100 Villages Data," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 37(1), pages 43-64.
  7. Thomas, Duncan & Beegle, Kathleen & Frankenberg, Elizabeth & Sikoki, Bondan & Strauss, John & Teruel, Graciela, 2004. "Education in a crisis," Journal of Development Economics, Elsevier, vol. 74(1), pages 53-85, June.
  8. Hal Hill & Budy Resosudarmo & Yogi Vidyattama, 2007. "Indonesia’s Changing Economic Geography," Working Papers in Economics and Development Studies (WoPEDS) 200713, Department of Economics, Padjadjaran University, revised Nov 2007.
  9. Ranjan, P., 1999. ""Credit Constraints and the Phenomenon of Child Labor"," Papers 98-99-12, California Irvine - School of Social Sciences.
  10. 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.
  11. Thomas W. Hertel & Maros Ivanic & Paul V. Preckel & John A. L. Cranfield, 2004. "The Earnings Effects of Multilateral Trade Liberalization: Implications for Poverty," World Bank Economic Review, World Bank Group, vol. 18(2), pages 205-236.
  12. Edmonds, Eric V. & Pavcnik, Nina, 2005. "The effect of trade liberalization on child labor," Journal of International Economics, Elsevier, vol. 65(2), pages 401-419, March.
  13. Robert Sparrow, 2005. "Protecting Education for the Poor in Times of Crisis: An Evaluation of a Scholarship Program in Indonesia," Development and Comp Systems 0501009, EconWPA.
  14. Gilbert,Christopher L. & Vines,David (ed.), 2006. "The World Bank," Cambridge Books, Cambridge University Press, number 9780521029018.
  15. M. Chatib Basri & Hal Hill, 2004. "Ideas, Interests and Oil Prices: The Political Economy of Trade Reform During Soeharto's Indonesia," The World Economy, Wiley Blackwell, vol. 27(5), pages 633-655, 05.
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