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A Theory of Exploitative Child Labor

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Abstract

We develop a model of exploitative child labor with two key features: first, parents have imperfect information about whether employment opportunities available to their children are exploitative or not. Second, firms choose whether or not to exploit their child workers. In our model, a ban on exploitative child labor is desirable, because it resolves the problem of imperfect information faced by parents, and therefore leads to Pareto efficiency. We also find that a ban leads to an increase in the wages of child workers, and that firm profits, even for firms that do not exploit child workers, fall. Finally, a ban has ambiguous effects at the macroeconomic level: aggregate child employment and aggregate output can rise or fall.

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  • Carol Rogers & Kenneth A. Swinnerton, 2002. "A Theory of Exploitative Child Labor," Working Papers gueconwpa~02-02-03, Georgetown University, Department of Economics.
  • Handle: RePEc:geo:guwopa:gueconwpa~02-02-03
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    Cited by:

    1. Bernd Beber & Christopher Blattman, 2010. "The Industrial Organization of Rebellion: The Logic of Forced Labor and Child Soldiering," HiCN Working Papers 72, Households in Conflict Network.
    2. Caroline Orset, 2008. "A Theory of Child Protection against Kidnapping," Cahiers de recherche 0816, CIRPEE.
    3. Randall Akee & Arnab K. Basu & Arjun Bedi & Nancy H. Chau, 2014. "Transnational Trafficking, Law Enforcement, and Victim Protection: A Middleman Trafficker's Perspective," Journal of Law and Economics, University of Chicago Press, vol. 57(2), pages 349-386.
    4. Del Carpio, Ximena V. & Loayza, Norman V., 2012. "The impact of wealth on the amount and quality of child labor," Policy Research Working Paper Series 5959, The World Bank.
    5. Jorge Soares, 2010. "Welfare Impact Of A Ban On Child Labor," Economic Inquiry, Western Economic Association International, vol. 48(4), pages 1048-1064, October.
    6. Eric V. Edmonds, 2014. "Does minimum age of employment regulation reduce child labor?," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-73, July.
    7. Sonnabend, Hendrik, 2015. "Good Intentions and Unintended Evil? Clients’ Punishment in the Market for Sex Services with Voluntary and Involuntary Providers," EconStor Preprints 110682, ZBW - Leibniz Information Centre for Economics.
    8. Lutfullah Lutf & Shahadat I Haq Yasini, 2018. "Factors Contributing to Child Labor in Afghanistan: A Case Study in Jalalabad City," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 3, pages 348-372, September.
    9. Saibal Kar & Hamid Beladi, 2017. "A Model of Smuggling and Trafficking of Illegal Immigrants with a Host Country Policy," Review of Development Economics, Wiley Blackwell, vol. 21(3), pages 698-712, August.
    10. Del Carpio, Ximena V. & Loayza, Norman V. & Wada, Tomoko, 2016. "The Impact of Conditional Cash Transfers on the Amount and Type of Child Labor," World Development, Elsevier, vol. 80(C), pages 33-47.
    11. Irving Rosales, 2013. "Learn, sweat or steal: a theory of development and the activity of children," Working Papers 0613, Universidad Iberoamericana, Department of Economics.
    12. Olivier Bargain & Delphine Boutin, 2017. "Minimum Age Regulation and Child Labor: New Evidence from Brazil," Working Papers hal-01629988, HAL.
    13. Chau, Nancy H., 2009. "Sweatshop Equilibrium," IZA Discussion Papers 4363, Institute of Labor Economics (IZA).
    14. Sonnabend, Hendrik & Stadtmann, Georg, 2018. "Good intentions and unintended evil? Adverse effects of criminalizing clients in paid sex markets with voluntary and involuntary prostitution," Discussion Papers 400, European University Viadrina Frankfurt (Oder), Department of Business Administration and Economics.
    15. Sylvain Dessy & Stéphane Pallage, 2003. "The Economics of Child Trafficking," Cahiers de recherche 0323, CIRPEE.
    16. Edmonds, Eric V. & Shrestha, Maheshwor, 2014. "You get what you pay for: Schooling incentives and child labor," Journal of Development Economics, Elsevier, vol. 111(C), pages 196-211.
    17. Davies, Ronald B., 2005. "Abstinence from child labor and profit seeking," Journal of Development Economics, Elsevier, vol. 76(1), pages 251-263, February.
    18. Sylvain Dessy & Caroline Orset & Legrand Yémélé Kana, 2012. "The Global Fight against Child Trafficking: How Can It Be Won ?," Cahiers de recherche 1213, CIRPEE.
    19. Artadi, Elsa & Björkman Nyqvist, Martina & Kuecken, Maria & La Ferrara, Eliana, 2018. "Understanding Human Trafficking Using Victim-Level Data," CEPR Discussion Papers 13279, C.E.P.R. Discussion Papers.
    20. Chau, Nancy H., 2016. "On sweatshop jobs and decent work," Journal of Development Economics, Elsevier, vol. 121(C), pages 120-134.
    21. Carol Ann Rogers & Kenneth A Swinnerton, 2005. "Slave Redemption When it Takes Time to Redeem Slaves," Development and Comp Systems 0510006, University Library of Munich, Germany.
    22. Sylvain E. Dessy & Flaubert Mbiekop & Stéphane Pallage, 2005. "The Economics of Child Trafficking (Part II)," Cahiers de recherche 0509, CIRPEE.

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    More about this item

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J4 - Labor and Demographic Economics - - Particular Labor Markets

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