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Child work and schooling under trade liberalization in Indonesia

  • Kis-Katos, Krisztina
  • Sparrow, Robert

We examine the effects of trade liberalization on child work and schooling in Indonesia. Our estimation strategy identifies geographical differences in the effects of trade policy through district and province level exposure to reduction in import tariff barriers. We use seven rounds (1993 to 2002) of the Indonesian annual national household survey (Susenas), and relate workforce participation and school enrolment of children aged 10-15 to geographic variation in relative tariff exposure. Our main findings show that increased exposure to trade liberalization is associated with a decrease in child work and an increase in enrolment among 10 to 15 year olds. The effects of tariff reductions are strongest for children from low skill backgrounds and in rural areas. However, a dynamic analysis suggests that these effects reflect the long term benefits of trade liberalization, through economic growth and subsequent income effects, while frictions and negative adjustment effects may occur in the short term.

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Paper provided by Verein für Socialpolitik, Research Committee Development Economics in its series Proceedings of the German Development Economics Conference, Frankfurt a.M. 2009 with number 17.

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Date of creation: 2009
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Handle: RePEc:zbw:gdec09:17
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  1. Robert Sparrow, 2005. "Protecting Education for the Poor in Times of Crisis: An Evaluation of a Scholarship Program in Indonesia," Development and Comp Systems 0501009, EconWPA.
  2. M. Chatib Basri & Hal Hill, 2004. "Ideas, Interests and Oil Prices: The Political Economy of Trade Reform During Soeharto's Indonesia," The World Economy, Wiley Blackwell, vol. 27(5), pages 633-655, 05.
  3. Amiti, Mary & Konings, Jozef, 2005. "Trade Liberalization, Intermediate Inputs and Productivity: Evidence from Indonesia," CEPR Discussion Papers 5104, C.E.P.R. Discussion Papers.
  4. Arnold, Jens & Javorcik, Beata, 2005. "Gifted Kids or Pushy Parents? Foreign Acquisitions and Plant Performance in Indonesia," CEPR Discussion Papers 5065, C.E.P.R. Discussion Papers.
  5. Lisa Cameron, 2001. "The Impact Of The Indonesian Financial Crisis On Children: An Analysis Using The 100 Villages Data," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 37(1), pages 43-64.
  6. Eric V. Edmonds & Nina Pavcnik & Petia Topalova, 2010. "Trade Adjustment and Human Capital Investments: Evidence from Indian Tariff Reform," American Economic Journal: Applied Economics, American Economic Association, vol. 2(4), pages 42-75, October.
  7. Hal Hill & RBudy Resosudarmo & Yogi Vidyattama, 2008. "Indonesia's Changing Economic Geography," Departmental Working Papers 2008-02, The Australian National University, Arndt-Corden Department of Economics.
  8. Gilbert,Christopher L. & Vines,David (ed.), 2006. "The World Bank," Cambridge Books, Cambridge University Press, number 9780521029018.
  9. Kruger, Diana I., 2007. "Coffee production effects on child labor and schooling in rural Brazil," Journal of Development Economics, Elsevier, vol. 82(2), pages 448-463, March.
  10. Cigno, Alessandro & Rosati, Furio C. & Guarcello, Lorenzo, 2002. "Does Globalisation Increase Child Labour?," IZA Discussion Papers 470, Institute for the Study of Labor (IZA).
  11. Ranjan, P., 1999. ""Credit Constraints and the Phenomenon of Child Labor"," Papers 98-99-12, California Irvine - School of Social Sciences.
  12. Thomas W. Hertel & Maros Ivanic & Paul V. Preckel & John A. L. Cranfield, 2004. "The Earnings Effects of Multilateral Trade Liberalization: Implications for Poverty," World Bank Economic Review, World Bank Group, vol. 18(2), pages 205-236.
  13. Edmonds, Eric V & Pavcnik, Nina, 2004. "International Trade and Child Labour: Cross-Country Evidence," CEPR Discussion Papers 4309, C.E.P.R. Discussion Papers.
  14. Thomas, Duncan & Beegle, Kathleen & Frankenberg, Elizabeth & Sikoki, Bondan & Strauss, John & Teruel, Graciela, 2004. "Education in a crisis," Journal of Development Economics, Elsevier, vol. 74(1), pages 53-85, June.
  15. Edmonds, Eric V. & Pavcnik, Nina, 2005. "The effect of trade liberalization on child labor," Journal of International Economics, Elsevier, vol. 65(2), pages 401-419, March.
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