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Child Labor and Coordination Failures

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Author Info
Sylvain Dessy () (Universite Laval and CREFA)
Stephane Pallage () (Center for Research on Economic Fluctuations and Employment, UQAM)

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Abstract

In this paper, we show how coordination failures may explain the prevalence of child labor in developing countries. We do so within a simple game-theoretic setup. Child labor arises in our environment because of the lack of a coordination mechanism between parental decisions to invest in the human capital of their children and firm's decisions to invest in skill-intensive technology. Governmental policies that help coordinate expectations lead to the disappearance of child labor.

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File URL: http://www.unites.uqam.ca/eco/CREFE/cahiers/cah109.pdf
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Publisher Info
Paper provided by CREFE, Université du Québec à Montréal in its series Cahiers de recherche CREFE / CREFE Working Papers with number 109.

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Length: 14 pages
Date of creation: Mar 2000
Date of revision:
Publication status: published (latest version) in Journal of Development Economics, 65/2, June 2001, 469-476
Handle: RePEc:cre:crefwp:109

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Related research
Keywords: Child labor; welfare; equilibrium selection; coordination;

Other versions of this item:

Find related papers by JEL classification:
I20 - Health, Education, and Welfare - - Education - - - General
J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
D60 - Microeconomics - - Welfare Economics - - - General
O30 - Economic Development, Technological Change, and Growth - - Technological Change - - - General

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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.:
  1. Rosenzweig, Mark R, 1990. "Population Growth and Human Capital Investments: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S38-70, October. [Downloadable!] (restricted)
  2. Aumann, Robert J, 1987. "Correlated Equilibrium as an Expression of Bayesian Rationality," Econometrica, Econometric Society, vol. 55(1), pages 1-18, January. [Downloadable!] (restricted)
  3. John C. Harsanyi & Reinhard Selten, 1988. "A General Theory of Equilibrium Selection in Games," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262582384.
  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. Acemoglu, Daron, 1994. "Search in the Labour Market, Incomplete Contracts and Growth," CEPR Discussion Papers 1026, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  6. 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. [Downloadable!] (restricted)
    Other versions:
  7. 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. [Downloadable!] (restricted)
  8. Lucas, Robert E, Jr, 1990. "Why Doesn't Capital Flow from Rich to Poor Countries?," American Economic Review, American Economic Association, vol. 80(2), pages 92-96, May. [Downloadable!] (restricted)
  9. Redding, Stephen, 1996. "The Low-Skill, Low-Quality Trap: Strategic Complementarities between Human Capital and R&D," Economic Journal, Royal Economic Society, vol. 106(435), pages 458-70, March. [Downloadable!] (restricted)
  10. Swaminathan, Madhura, 1998. "Economic growth and the persistence of child labor: Evidence from an Indian city," World Development, Elsevier, vol. 26(8), pages 1513-1528, August. [Downloadable!] (restricted)
  11. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July. [Downloadable!] (restricted)
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