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Endogenous Technical Progress and the Emergence of Child Labor Laws

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  • Dessy, Sylvain E.

Abstract

I develop a theory of technical progress that uncovers sufficient conditions for opposition to the adoption of child labor laws to disappear over time. The supply of child labor comes exclusively from unskilled parents, because of their inability to help their children benefit from formal education, while its demand originates from capitalists-the firms' owners. Because child labor crowds out adult employment, there are always social pressures to ban it. However, such pressures are met by capitalists' opposition. Capitalists oppose the adoption of a ban on child labor because such a ban reduces opportunities for earning a high return on capital. Technical progress, induced by skill accumulation, improves the earning prospects of firms hiring adult workers only, while it reduces those of firms hiring children only. As a result, more capitalists are drawn into the adult labor market, and industrial opposition to a ban on child labor eventually vanishes over time. Provided child labor exhibits skill-enhancing learning-by-doing, policy action to speed up the emergence of child labor laws should therefore focus on education reforms that raise the quality of education school-goers receive, and on political reforms that raise the cost of lobbying legislators against adopting a ban on child labor. However, in countries where child labor provides little or no opportunities for learning-by-doing, no law will emerge unless appropriately targeted poverty alleviation mechanisms are designed, in order to induce unskilled parents to allocate a positive fraction of child's time to schooling.

Suggested Citation

  • Dessy, Sylvain E., 2003. "Endogenous Technical Progress and the Emergence of Child Labor Laws," Cahiers de recherche 0317, CIRPEE.
  • Handle: RePEc:lvl:lacicr:0317
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    References listed on IDEAS

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    1. Goldin, Claudia, 1979. "Household and market production of families in a late nineteenth century American city," Explorations in Economic History, Elsevier, vol. 16(2), pages 111-131, April.
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    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • 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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