IDEAS home Printed from https://ideas.repec.org/p/hit/hiasdp/hias-e-25.html
   My bibliography  Save this paper

Perverse Consequences Of Well-Intentioned Regulation: Evidence From India’S Child Labor Ban

Author

Listed:
  • BHARADWAJ, Prachant
  • LAKDAWALA, Leah K.
  • LI, Nicholas

Abstract

While bans against child labor are a ubiquitous policy tool, there is very little empirical evidence on their effectiveness. In this paper, we examine the consequences of India's landmark legislation against child labor, the Child Labor (Prohibition and Regulation) Act of 1986. Using data from employment surveys conducted before and after the ban, and using age restrictions that determined whom the ban applied to, we show that the relative probability of child employment increases and child wages (relative to adult wages) decrease after the ban. Our main specification relies on comparing changes in work probabilities over time for children of the same age but with siblings who are rendered either eligible or ineligible for legal work when the ban is implemented. The increases in the probability of economic activity are largest for children in areas where (i) the industries targeted by the ban play a larger role in local labor markets and (ii) the probability of employer inspections are higher. These results are consistent with a theoretical model building on the seminal work of Basu and Van (1998) and Basu (2005), where families use child labor to reach subsistence constraints and where child wages decrease in response to bans, leading poor families to utilize more child labor. We also examine the effects of the ban at the household level. Using linked consumption and expenditure data, we find that along the margins of assets and share of staple goods in calorie consumption, households are worse off after the ban.

Suggested Citation

  • BHARADWAJ, Prachant & LAKDAWALA, Leah K. & LI, Nicholas, 2016. "Perverse Consequences Of Well-Intentioned Regulation: Evidence From India’S Child Labor Ban," Discussion paper series HIAS-E-25, Hitotsubashi Institute for Advanced Study, Hitotsubashi University.
  • Handle: RePEc:hit:hiasdp:hias-e-25
    as

    Download full text from publisher

    File URL: http://hermes-ir.lib.hit-u.ac.jp/rs/bitstream/10086/27807/1/070_hiasDP-E-25.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Emmanuel Skoufias & Susan Wendy Parker, 2001. "Conditional Cash Transfers and Their Impact on Child Work and Schooling: Evidence from the PROGRESA Program in Mexico," ECONOMIA JOURNAL, THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION - LACEA, vol. 0(Fall 2001), pages 45-96, August.
    2. Eric V. Edmonds, 2005. "Does Child Labor Decline with Improving Economic Status?," Journal of Human Resources, University of Wisconsin Press, vol. 40(1).
    3. Edmonds, Eric V., 2008. "Child Labor," Handbook of Development Economics, Elsevier.
    4. Kirk B. Doran, 2013. "How Does Child Labor Affect the Demand for Adult Labor?," Journal of Human Resources, University of Wisconsin Press, vol. 48(3), pages 702-735.
    5. Zivin, Joshua Graff & Thirumurthy, Harsha & Goldstein, Markus, 2009. "AIDS treatment and intrahousehold resource allocation: Children's nutrition and schooling in Kenya," Journal of Public Economics, Elsevier, vol. 93(7-8), pages 1008-1015, August.
    6. Chin, Aimee, 2005. "Can redistributing teachers across schools raise educational attainment? Evidence from Operation Blackboard in India," Journal of Development Economics, Elsevier, vol. 78(2), pages 384-405, December.
    7. Basu, Kaushik & Van, Pham Hoang, 1998. "The Economics of Child Labor," American Economic Review, American Economic Association, vol. 88(3), pages 412-427, June.
    8. Gary Solon & Steven J. Haider & Jeffrey M. Wooldridge, 2015. "What Are We Weighting For?," Journal of Human Resources, University of Wisconsin Press, vol. 50(2), pages 301-316.
    9. Kaushik Basu, 1999. "Child Labor: Cause, Consequence, and Cure, with Remarks on International Labor Standards," Journal of Economic Literature, American Economic Association, vol. 37(3), pages 1083-1119, September.
    10. A. Colin Cameron & Jonah B. Gelbach & Douglas L. Miller, 2008. "Bootstrap-Based Improvements for Inference with Clustered Errors," The Review of Economics and Statistics, MIT Press, vol. 90(3), pages 414-427, August.
    11. Basu, Kaushik, 2005. "Child labor and the law: Notes on possible pathologies," Economics Letters, Elsevier, vol. 87(2), pages 169-174, May.
    12. Kirk Doran, 2012. "How Does Child Labor Affect the Demand for Adult Labor? Evidence from Rural Mexico," Working Papers 016, University of Notre Dame, Department of Economics, revised Aug 2012.
    13. Timothy Besley & Robin Burgess, 2004. "Can Labor Regulation Hinder Economic Performance? Evidence from India," The Quarterly Journal of Economics, Oxford University Press, vol. 119(1), pages 91-134.
    14. Matthias Doepke & Fabrizio Zilibotti, 2005. "The Macroeconomics of Child Labor Regulation," American Economic Review, American Economic Association, vol. 95(5), pages 1492-1524, December.
    15. Kathleen Beegle & Rajeev Dehejia & Roberta Gatti, 2009. "Why Should We Care About Child Labor?: The Education, Labor Market, and Health Consequences of Child Labor," Journal of Human Resources, University of Wisconsin Press, vol. 44(4).
    16. Sonia Bhalotra, 2007. "Is Child Work Necessary?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 69(1), pages 29-55, February.
    17. Eric V. Edmonds & Nina Pavcnik & Petia Topalova, 2010. "Trade Adjustment and Human Capital Investments: Evidence from Indian Tariff Reform," American Economic Journal: Applied Economics, American Economic Association, vol. 2(4), pages 42-75, October.
    18. Lleras-Muney, Adriana, 2002. "Were Compulsory Attendance and Child Labor Laws Effective? An Analysis from 1915 to 1939," Journal of Law and Economics, University of Chicago Press, vol. 45(2), pages 401-435, October.
    19. Jafarey, Saqib & Lahiri, Sajal, 2002. "Will trade sanctions reduce child labour?: The role of credit markets," Journal of Development Economics, Elsevier, vol. 68(1), pages 137-156, June.
    20. Sonia Bhalotra & Christopher Heady, 2003. "Child Farm Labor: The Wealth Paradox," World Bank Economic Review, World Bank Group, vol. 17(2), pages 197-227, December.
    21. Gordon, Roger & Li, Wei, 2009. "Tax structures in developing countries: Many puzzles and a possible explanation," Journal of Public Economics, Elsevier, vol. 93(7-8), pages 855-866, August.
    22. Matthew D. Webb, 2014. "Reworking Wild Bootstrap Based Inference for Clustered Errors," Working Papers 1315, Queen's University, Department of Economics.
    23. M.Biggeri & L.Guarcello & S.Lyon & F.Rosati, 2003. "The Puzzle of 'Idle' Children: Neither in School nor performing Economic Activity: Evidence from six Countries," UCW Working Paper 5, Understanding Children's Work (UCW Programme).
    24. Seema Jayachandran, 2006. "Selling Labor Low: Wage Responses to Productivity Shocks in Developing Countries," Journal of Political Economy, University of Chicago Press, vol. 114(3), pages 538-575, June.
    25. Jean-Marie Baland & James A. Robinson, 2000. "Is Child Labor Inefficient?," Journal of Political Economy, University of Chicago Press, vol. 108(4), pages 663-679, August.
    26. Stigler, George J, 1992. "Law or Economics?," Journal of Law and Economics, University of Chicago Press, vol. 35(2), pages 455-468, October.
    27. Carol Ann Rogers & Kenneth A. Swinnerton, 1999. "The Economics of Child Labor: Comment," American Economic Review, American Economic Association, vol. 89(5), pages 1382-1385, December.
    28. Moehling, Carolyn M., 1999. "State Child Labor Laws and the Decline of Child Labor," Explorations in Economic History, Elsevier, vol. 36(1), pages 72-106, January.
    29. Marco Manacorda, 2006. "Child Labor and the Labor Supply of Other Household Members: Evidence from 1920 America," American Economic Review, American Economic Association, vol. 96(5), pages 1788-1801, December.
    30. Olivier Bargain & Sumon Kumar Bhaumik & Manisha Chakrabarty & Zhong Zhao, 2009. "Earnings Differences Between Chinese And Indian Wage Earners, 1987-2004," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 55(s1), pages 562-587, July.
    31. Puja Vasudeva Dutta, 2006. "Returns to Education: New Evidence for India, 1983-1999," Education Economics, Taylor & Francis Journals, vol. 14(4), pages 431-451.
    32. Kaivan Munshi & Mark Rosenzweig, 2006. "Traditional Institutions Meet the Modern World: Caste, Gender, and Schooling Choice in a Globalizing Economy," American Economic Review, American Economic Association, vol. 96(4), pages 1225-1252, September.
    33. Federico A. Bugni, 2012. "Child labor legislation: effective, benign, both, or neither?," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 6(3), pages 223-248, October.
    34. Robert T. Jensen & Nolan H. Miller, 2010. "A Revealed Preference Approach to Measuring Hunger and Undernutrition," NBER Working Papers 16555, National Bureau of Economic Research, Inc.
    35. Boockmann, Bernhard, 2010. "The Effect of ILO Minimum Age Conventions on Child Labor and School Attendance: Evidence From Aggregate and Individual-Level Data," World Development, Elsevier, vol. 38(5), pages 679-692, May.
    36. Marigee P. Bacolod & Priya Ranjan, 2008. "Why Children Work, Attend School, or Stay Idle: The Roles of Ability and Household Wealth," Economic Development and Cultural Change, University of Chicago Press, vol. 56, pages 791-828.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kaletski, Elizabeth & Prakash, Nishith, 2016. "Does Political Reservation for Minorities Affect Child Labor? Evidence from India," World Development, Elsevier, vol. 87(C), pages 50-69.
    2. Jaime DE MELO & Marcelo OLARREAGA, 2017. "Trade Related Institutions and Development," Working Papers P199, FERDI.
    3. Frédéric Docquier & Tobias Müller & Joaquín Naval, 2017. "Informality and Long-Run Growth," Scandinavian Journal of Economics, Wiley Blackwell, vol. 119(4), pages 1040-1085, October.
    4. Olivier Bargain & Delphine Boutin, 2017. "Minimum age regulation and child labor: New evidence from Brazil," Working Papers hal-01652435, HAL.
    5. Putnick, Diane L. & Bornstein, Marc H., 2015. "Is child labor a barrier to school enrollment in low- and middle-income countries?," International Journal of Educational Development, Elsevier, vol. 41(C), pages 112-120.
    6. repec:oup:wbecrv:v:30:y:2017:i:supplement_1:p:s137-s144. is not listed on IDEAS
    7. Caio Piza & André Portela Souza, 2017. "The Causal Impacts of Child Labor Law in Brazil: Some Preliminary Findings," World Bank Economic Review, World Bank Group, vol. 30(Supplemen), pages 137-144.

    More about this item

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J82 - Labor and Demographic Economics - - Labor Standards - - - Labor Force Composition
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hit:hiasdp:hias-e-25. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Digital Resources Section, Hitotsubashi University Library). General contact details of provider: http://edirc.repec.org/data/ashitjp.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.