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A Theory of Exploitative Child Labor

Author

Listed:
  • Carol Ann Rogers

    (Georgetown University)

  • Kenneth A. Swinnerton

    (U.S. Department of Labor Bureau of International Labor Affairs)

Abstract

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.

Suggested Citation

  • Carol Ann Rogers & Kenneth A. Swinnerton, 2003. "A Theory of Exploitative Child Labor," Development and Comp Systems 0306005, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpdc:0306005
    Note: Type of Document - ; pages: 28
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    References listed on IDEAS

    as
    1. 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.
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    Cited by:

    1. repec:bla:rdevec:v:21:y:2017:i:3:p:698-712 is not listed on IDEAS
    2. Del Carpio, Ximena V. & Loayza, Norman V. & Wada, Tomoko, 2016. "The Impact of Conditional Cash Transfers on the Amount and Type of Child Labor," World Development, Elsevier, vol. 80(C), pages 33-47.
    3. Irving Rosales, 2013. "Learn, sweat or steal: a theory of development and the activity of children," Working Papers 0613, Universidad Iberoamericana, Department of Economics.
    4. Bernd Beber & Christopher Blattman, 2010. "The Industrial Organization of Rebellion: The Logic of Forced Labor and Child Soldiering," HiCN Working Papers 72, Households in Conflict Network.
    5. Olivier Bargain & Delphine Boutin, 2017. "Minimum Age Regulation and Child Labor: New Evidence from Brazil," Working Papers hal-01629988, HAL.
    6. Caroline Orset, 2008. "A Theory of Child Protection against Kidnapping," Cahiers de recherche 0816, CIRPEE.
    7. Randall Akee & Arnab K. Basu & Arjun Bedi & Nancy H. Chau, 2014. "Transnational Trafficking, Law Enforcement, and Victim Protection: A Middleman Trafficker's Perspective," Journal of Law and Economics, University of Chicago Press, vol. 57(2), pages 349-386.
    8. Del Carpio, Ximena V. & Loayza, Norman V., 2012. "The impact of wealth on the amount and quality of child labor," Policy Research Working Paper Series 5959, The World Bank.
    9. Chau, Nancy H., 2009. "Sweatshop Equilibrium," IZA Discussion Papers 4363, Institute for the Study of Labor (IZA).
    10. Jorge Soares, 2010. "Welfare Impact Of A Ban On Child Labor," Economic Inquiry, Western Economic Association International, vol. 48(4), pages 1048-1064, October.
    11. Sylvain Dessy & Stéphane Pallage, 2003. "The Economics of Child Trafficking," Cahiers de recherche 0323, CIRPEE.
    12. Edmonds, Eric V. & Shrestha, Maheshwor, 2014. "You get what you pay for: Schooling incentives and child labor," Journal of Development Economics, Elsevier, vol. 111(C), pages 196-211.
    13. Eric V. Edmonds, 2014. "Does minimum age of employment regulation reduce child labor?," IZA World of Labor, Institute for the Study of Labor (IZA), pages 1-73, July.
    14. Davies, Ronald B., 2005. "Abstinence from child labor and profit seeking," Journal of Development Economics, Elsevier, vol. 76(1), pages 251-263, February.
    15. Sylvain Dessy & Caroline Orset & Legrand Yémélé Kana, 2012. "The Global Fight against Child Trafficking: How Can It Be Won ?," Cahiers de recherche 1213, CIRPEE.
    16. Sonnabend, Hendrik, 2015. "Good Intentions and Unintended Evil? Clients’ Punishment in the Market for Sex Services with Voluntary and Involuntary Providers," EconStor Preprints 110682, ZBW - German National Library of Economics.
    17. Chau, Nancy H., 2016. "On sweatshop jobs and decent work," Journal of Development Economics, Elsevier, vol. 121(C), pages 120-134.
    18. Carol Ann Rogers & Kenneth A Swinnerton, 2005. "Slave Redemption When it Takes Time to Redeem Slaves," Development and Comp Systems 0510006, EconWPA.
    19. Sylvain E. Dessy & Flaubert Mbiekop & Stéphane Pallage, 2005. "The Economics of Child Trafficking (Part II)," Cahiers de recherche 0509, CIRPEE.

    More about this item

    Keywords

    child labor; economic exploitation;

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J4 - Labor and Demographic Economics - - Particular Labor Markets

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