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Agricultural Dualism, Incidence of Child Labour and Subsidy Policies

  • Dwibedi, Jayanta
  • Chaudhuri, Sarbajit

This paper purports to examine the validity of the common belief that in a developing economy the backward agricultural sector should be subsidized as poorer group of the working population are employed in this sector that send their children out to work out of sheer poverty. A three-sector general equilibrium framework with agricultural dualism and child labour has been employed for the purpose of analysis. It finds that a price subsidy policy to backward agricultural sector is likely to aggravate the child labour incidence while a credit subsidy to advanced agriculture may be effective in reducing the gravity of the problem in the economy. The paper, therefore, questions the desirability of assisting backward agriculture for eradicating child labour in the society.

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File URL: http://mpra.ub.uni-muenchen.de/18002/1/MPRA_paper_18002.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 18002.

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Date of creation: 15 Jun 2009
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Handle: RePEc:pra:mprapa:18002
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  1. Saqib Jafarey & Sajal Lahiri, 1999. "Will trade sanctions reduce child labour? The role of credit markets," Economics Discussion Papers 500, University of Essex, Department of Economics.
  2. Ranjan, Priya, 1999. "An economic analysis of child labor," Economics Letters, Elsevier, vol. 64(1), pages 99-105, July.
  3. Basu, Kaushik, 1998. "Child labor : cause, consequence, and cure, with remarks on International Labor Standards," Policy Research Working Paper Series 2027, The World Bank.
  4. Basu, Kaushik & Van, Pham Hoang, 1998. "The Economics of Child Labor," American Economic Review, American Economic Association, vol. 88(3), pages 412-27, June.
  5. Ranjan, Priya, 2001. "Credit constraints and the phenomenon of child labor," Journal of Development Economics, Elsevier, vol. 64(1), pages 81-102, February.
  6. 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.
  7. Sarbajit Chaudhuri & Jayanta Kumar Dwibedi, 2007. "Foreign Capital Inflow, Fiscal Policies And Incidence Of Child Labour In A Developing Economy," Manchester School, University of Manchester, vol. 75(1), pages 17-46, 01.
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