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Impact of Social Labeling on Child Labor in the Indian Carpet Industry


  • Chakrabarty, Sayan
  • Grote, Ulrike


Does the labeling of tradable products like carpets which have been produced without child labor contribute to decreased vulnerability of poor households and their children? This paper analyzes which factors determine the probability of a child to work in the carpet industry, and examines the influence of non governmental organizations (NGOs) like Rugmark which are engaged in the social labeling process. Data was obtained from interviews with 417 households in North India. Based on their calorie intake, the households were dissected into two groups, one very poor group below and another one above the subsistence level. The econometric analysis shows that a child living in a very poor household is more likely to work when his/her calorie intake increases (nutritional efficiency wage argument), while the opposite is true for a child from the above-subsistence household group. In addition, it has been found that social labeling has no significant influence on the very poor households. In contrast, at the above-subsistence level, social labeling has a significant positive welfare influence on the households. Furthermore, the occurrence of child labor is more likely for NGOs without monitoring.

Suggested Citation

  • Chakrabarty, Sayan & Grote, Ulrike, 2007. "Impact of Social Labeling on Child Labor in the Indian Carpet Industry," Hannover Economic Papers (HEP) dp-366, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
  • Handle: RePEc:han:dpaper:dp-366

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    Social Labeling; Child Labor; Carpet Industry; India;

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • I20 - Health, Education, and Welfare - - Education - - - General
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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