Camus myth of sisyphus and other essays on poverty, ways to help the poor essay, business plan written in first or third person
Published onMarch 11, 2018
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While many policy options exist to address child labor, bans and regulations are among the most popular policy tools used worldwide. However, it is not clear that having such laws on paper will always lead to reductions in child labor. Governments in countries where child labor is prevalent rarely have the capacity and resources to perfectly enforce regulations, as documented in a recent study by the economists Eric Edmonds and Maheshwor Shrestha. Edmonds and Shrestha use data from 59 mostly developing countries and find that minimum age restrictions do not have any consistent effects on child work or other activities like attending school.
Restrictions can lower wages and force more children to work. Payments to families and education assistance are more productive.
Turning to bans, a simple economic model by Kaushik Basu suggests that when bans are imperfectly enforced, they raise the cost of hiring children, as employers anticipate facing stiff fines or other penalties when caught using child labor. Thus bans may lower the wages that children are paid. If families send their children to work out of necessity, a drop in child wages lowers family income for those who rely on child labor to reach subsistence, thereby compelling families to supply more child work, rather than less. In joint project with Prashant Bharadwaj and Nicholas Li we empirically tested for such a possibility under India's flagship legislation against child labor, the Child Labor Prohibition and Regulation Act of 1986. Our paper shows that after the ban, employment probabilities of children under the legal working age of 14, relative to those of legal age, rise rather than fall. Children under 14 are 1.7 percentage points more likely to work after the ban; this amounts to a 12 percent relative increase in child employment over the mean. This seems to stem in part from the large drop in child wages, which fall by nearly 4 percent relative to adult wages after the ban. In the presence of multiple market failures and weak state capacity to enforce such regulations, the potential for unintended consequences of bans and regulations are important to keep in mind. Well-enforced bans, on the other hand, could decrease the incidence of child employment, but whether they improve household welfare that might depend on income from child work is not clear.
The bigger picture here is that there are many options other than bans and regulations to reduce time spent in economic activities and out of school such as cash transfers to families and increasing investments in education. For example, a recently published article by Eric Edmonds and Norbert Schady shows that providing cash transfers to poor families in Ecuador results in large reductions in the likelihood children engage in paid employment.
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Topics: child labor, development, inequality, labor