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Child Labor, Idiosyncratic Shocks, and Social Policy

  • Alice Fabre
  • Stéphane Pallage

In this paper, we measure the welfare effects of banning child labor in an economy with strong idiosyncratic shocks to employment. We then design two different policies: an unemployment insurance program and a universal basic income system. We show that they can often lead to an endogenous elimination of child labor. We work within a dynamic, general equilibrium model calibrated to South Africa in the 1990s.

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File URL: http://www.cirpee.org/fileadmin/documents/Cahiers_2011/CIRPEE11-15.pdf
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Paper provided by CIRPEE in its series Cahiers de recherche with number 1115.

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Date of creation: 2011
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Handle: RePEc:lvl:lacicr:1115
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  1. Kathleen Beegle & Rajeev Dehejia & Roberta Gatti, 2004. "Why Should We Care About Child Labor? The Education, Labor Market, and Health Consequences of Child Labor," NBER Working Papers 10980, National Bureau of Economic Research, Inc.
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  3. Geeta Kingdon & John Knight, 2001. "Race and the Incidence of Unemployment in South Africa," CSAE Working Paper Series 2001-18, Centre for the Study of African Economies, University of Oxford.
  4. Hopenhayn, Hugo A & Nicolini, Juan Pablo, 1997. "Optimal Unemployment Insurance," Journal of Political Economy, University of Chicago Press, vol. 105(2), pages 412-38, April.
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  6. Karan Singh, B, 2011. "Impact of adverse economic shocks on the Indian child labour market and the schooling of children of poor households," MPRA Paper 30958, University Library of Munich, Germany.
  7. Edmonds, Eric V., 2006. "Child labor and schooling responses to anticipated income in South Africa," Journal of Development Economics, Elsevier, vol. 81(2), pages 386-414, December.
  8. Basu, Kaushik, 1998. "Child labor : cause, consequence, and cure, with remarks on International Labor Standards," Policy Research Working Paper Series 2027, The World Bank.
  9. Hansen, Gary D & Imrohoroglu, Ayse, 1992. "The Role of Unemployment Insurance in an Economy with Liquidity Constraints and Moral Hazard," Journal of Political Economy, University of Chicago Press, vol. 100(1), pages 118-42, February.
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  11. Sylvain E. Dessy & Stéphane Pallage, 2005. "A Theory of the Worst Forms of Child Labour," Economic Journal, Royal Economic Society, vol. 115(500), pages 68-87, 01.
  12. Dani Rodrik, 2006. "Understanding South Africa's Economic Puzzles," NBER Working Papers 12565, National Bureau of Economic Research, Inc.
  13. 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.
  14. Dammert, Ana C., 2007. "Child Labor and Schooling Response to Changes in Coca Production in Rural Peru," IZA Discussion Papers 2869, Institute for the Study of Labor (IZA).
  15. Andolfatto, David & Gomme, Paul, 1996. "Unemployment insurance and labor-market activity in Canada," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 44(1), pages 47-82, June.
  16. Michael Grimm, 2008. "Food price inflation and schooling," Ibero America Institute for Econ. Research (IAI) Discussion Papers 174, Ibero-America Institute for Economic Research.
  17. Dessy, Sylvain E. & Pallage, Stephane, 2001. "Child labor and coordination failures," Journal of Development Economics, Elsevier, vol. 65(2), pages 469-476, August.
  18. Delphine Boutin, 2011. "Envoi de fonds et allocation du temps des enfants au Niger : L’effet indirect des chocs négatifs," Larefi Working Papers 1105, Larefi, Université Bordeaux 4.
  19. Doepke, Matthias & Zilibotti, Fabrizio, 2008. "International Labor Standards and the Political Economy of Child Labor Regulation," IZA Discussion Papers 3742, Institute for the Study of Labor (IZA).
  20. Jorge Soares, 2010. "Welfare Impact Of A Ban On Child Labor," Economic Inquiry, Western Economic Association International, vol. 48(4), pages 1048-1064, October.
  21. Steven Shavell & Laurence Weiss, 1978. "The Optimal Payment of Unemployment Insurance Benefits over Time," Cowles Foundation Discussion Papers 503, Cowles Foundation for Research in Economics, Yale University.
  22. Basu, Kaushik, 1999. "The intriguing relation between adult minimum wage and child labor," Policy Research Working Paper Series 2173, The World Bank.
  23. E. Paul Durrenberger, 2005. "Labour," Chapters, in: A Handbook of Economic Anthropology, chapter 8 Edward Elgar.
  24. Matthias Doepke & Fabrizio Zilibotti, 2005. "The macroeconomics of child labor regulation," Staff Report 354, Federal Reserve Bank of Minneapolis.
  25. Basu, Kaushik & Van, Pham Hoang, 1998. "The Economics of Child Labor," American Economic Review, American Economic Association, vol. 88(3), pages 412-27, June.
  26. Stephane Pallage & Christian Zimmermann, 2000. "Buying Out Child Labor?," Cahiers de recherche CREFE / CREFE Working Papers 123, CREFE, Université du Québec à Montréal.
  27. Baily, Martin Neil, 1978. "Some aspects of optimal unemployment insurance," Journal of Public Economics, Elsevier, vol. 10(3), pages 379-402, December.
  28. Robert Jensen, 2000. "Agricultural Volatility and Investments in Children," American Economic Review, American Economic Association, vol. 90(2), pages 399-404, May.
  29. Luis Felipe López Calva, 2002. "A social stigma model of child labor," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 17(2), pages 193-217.
  30. Basu, Kaushik & Zarghamee, Homa, 2009. "Is product boycott a good idea for controlling child labor? A theoretical investigation," Journal of Development Economics, Elsevier, vol. 88(2), pages 217-220, March.
  31. Pallage, Stephane & Zimmermann, Christian, 2005. "Heterogeneous labor markets and generosity towards the unemployed: an international perspective," Journal of Comparative Economics, Elsevier, vol. 33(1), pages 88-106, March.
  32. Pallage, Stephane & Zimmermann, Christian, 2001. "Voting on Unemployment Insurance," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(4), pages 903-23, November.
  33. Beegle, Kathleen & Dehejia, Rajeev H. & Gatti, Roberta, 2006. "Child labor and agricultural shocks," Journal of Development Economics, Elsevier, vol. 81(1), pages 80-96, October.
  34. Karine S. Moe, 1998. "Fertility, Time Use, and Economic Development," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 1(3), pages 699-718, July.
  35. Moehling, Carolyn M., 2005. ": Youth Employment and Household Decision Making in the Early Twentieth Century," The Journal of Economic History, Cambridge University Press, vol. 65(02), pages 414-438, June.
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