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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. 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.
  2. 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.
  3. 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.
  4. Jens Matthias Arnold & Beata Smarzynska Javorcik, 2005. "Gifted Kids or Pushy Parents? Foreign Acquisitions and Plant Performance in Indonesia," Development Working Papers 197, Centro Studi Luca d\'Agliano, University of Milano.
  5. Ranjan, P., 1999. ""Credit Constraints and the Phenomenon of Child Labor"," Papers 98-99-12, California Irvine - School of Social Sciences.
  6. Cigno, Alessandro & Rosati, Furio C. & Guarcello, Lorenzo, 2002. "Does Globalization Increase Child Labor?," World Development, Elsevier, vol. 30(9), pages 1579-1589, September.
  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. Petia Topalova & Eric Edmonds & Nina Pavcnik, 2007. "Trade Adjustment and Human Capital Investments: Evidence from Indian Tariff Reform," Working Papers id:999, eSocialSciences.
  9. 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.
  10. Robert Sparrow, 2007. "Protecting Education for the Poor in Times of Crisis: An Evaluation of a Scholarship Programme in Indonesia," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 69(1), pages 99-122, 02.
  11. repec:cup:cbooks:9780521029018 is not listed on IDEAS
  12. 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.
  13. Edmonds, Eric V. & Pavcnik, Nina, 2006. "International trade and child labor: Cross-country evidence," Journal of International Economics, Elsevier, vol. 68(1), pages 115-140, January.
  14. 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.
  15. 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.
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