A Theory of Exploitative Child Labor
We develop a model of exploitative child labor with two key features: first, parents have imperfect information about whether employment opportunities available to their children are exploitative or not. Second, firms choose whether or not to exploit their child workers. In our model, a ban on exploitative child labor is desirable, because it resolves the problem of imperfect information faced by parents, and therefore leads to Pareto efficiency. We also find that a ban leads to an increase in the wages of child workers, and that firm profits, even for firms that do not exploit child workers, fall. Finally, a ban has ambiguous effects at the macroeconomic level: aggregate child employment and aggregate output can rise or fall.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Dessy, Sylvain E. & Pallage, Stephane, 2001.
"Child labor and coordination failures,"
Journal of Development Economics,
Elsevier, vol. 65(2), pages 469-476, August.
- 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.
- Albrecht, James & Axell, Bo, 1983.
"An Equilibrium Model of Search Unemployment,"
83-10, C.V. Starr Center for Applied Economics, New York University.
- Eric V. Edmonds & Nina Pavcnik, 2005. "Child Labor in the Global Economy," Journal of Economic Perspectives, American Economic Association, vol. 19(1), pages 199-220, Winter.
- E. Paul Durrenberger, 2005. "Labour," Chapters, in: A Handbook of Economic Anthropology, chapter 8 Edward Elgar.
- Arnab K. Basu & Nancy H. Chau, 2004. "Exploitation of Child Labor and the Dynamics of Debt Bondage," Journal of Economic Growth, Springer, vol. 9(2), pages 209-238, 06.
- 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.
- Basu, Kaushik, 1998. "Child labor : cause, consequence, and cure, with remarks on International Labor Standards," Policy Research Working Paper Series 2027, The World Bank.
- Sylvain E. Dessy & Désiré Vencatachellum, 2003.
"Explaining cross-country differences in policy response to child labour,"
Canadian Journal of Economics,
Canadian Economics Association, vol. 36(1), pages 1-20, February.
- Sylvain Dessy & Désiré Vencatachellum, 2002. "Explaining Cross-Country Differences in Policy Response to Child Labour," Cahiers de recherche 02-03, HEC Montréal, Institut d'économie appliquée.
- Kenneth A. Swinnerton, 1997. "An Essay on Economic Efficiency and Core Labour Standards," The World Economy, Wiley Blackwell, vol. 20(1), pages 73-86, 01.
- Ranjan, Priya, 2001.
"Credit constraints and the phenomenon of child labor,"
Journal of Development Economics,
Elsevier, vol. 64(1), pages 81-102, February.
- Ranjan, P., 1999. ""Credit Constraints and the Phenomenon of Child Labor"," Papers 98-99-12, California Irvine - School of Social Sciences.
- 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.
- Sylvain Dessy & Stéphane Pallage, 2003. "The Economics of Child Trafficking," Cahiers de recherche 0323, CIRPEE.
- Genicot, Garance, 2002. "Bonded labor and serfdom: a paradox of voluntary choice," Journal of Development Economics, Elsevier, vol. 67(1), pages 101-127, February.
- Arnab K. Basu & Nancy H. Chau, 2003. "Targeting Child Labor in Debt Bondage: Evidence, Theory, and Policy Implications," World Bank Economic Review, World Bank Group, vol. 17(2), pages 255-281, December.
- Basu, Kaushik & Van, Pham Hoang, 1998. "The Economics of Child Labor," American Economic Review, American Economic Association, vol. 88(3), pages 412-27, June.
- 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.
- Carol Ann Rogers & Kenneth A. Swinnerton, 1999. "Inequality, Productivity, and Child Labor," Labor and Demography 9907003, EconWPA, revised 30 Jul 1999.
- Natalia T. Tamirisa & R. B. Johnston, 1998. "Why Do Countries Use Capital Controls?," IMF Working Papers 98/181, International Monetary Fund.
- Swinnerton, Kenneth A, 1996. "Minimum Wages in an Equilibrium Search Model with Diminishing Returns to Labor in Production," Journal of Labor Economics, University of Chicago Press, vol. 14(2), pages 340-55, April.
When requesting a correction, please mention this item's handle: RePEc:wpa:wuwpdc:0306005. 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: (EconWPA)
If references are entirely missing, you can add them using this form.