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The intriguing relation between adult minimum wage and child labor

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Author Info
Basu, Kaushik

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Abstract

Because most parents send their children to work when compelled by poverty, one would expect a rise in adult wage to lower child labor. However, if the rise in wage is achieved by a minimum wage law, its impact can be intriguing. It can, for instance, cause some adults to be unemployed, and send their children to work, which in turn displaces more adult labor, and sends more children to work. The paper solves this process, and predicts the incidence of child labor. It shows that, for appropriate parametric configurations, child labor may fall, or rise as the adult minimum wage is raised.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2173.

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Date of creation: 30 Aug 1999
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Handle: RePEc:wbk:wbrwps:2173

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Related research
Keywords: Public Health Promotion; Labor Markets; Environmental Economics&Policies; Street Children; Economic Theory&Research; Child Labor; Economic Theory&Research; Street Children; Labor Markets; Environmental Economics&Policies;

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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. Basu, Kaushik & Van, Pham Hoang, 1998. "The Economics of Child Labor," American Economic Review, American Economic Association, vol. 88(3), pages 412-27, June.
  2. 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:
  3. Ashenfelter, Orley, 1980. "Unemployment as Disequilibrium in a Model of Aggregate Labor Supply," Econometrica, Econometric Society, vol. 48(3), pages 547-64, April. [Downloadable!] (restricted)
    Other versions:
  4. Maskus, Keith E., 1997. "Should core labor standards be imposed through international trade policy?," Policy Research Working Paper Series 1817, The World Bank. [Downloadable!]
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Cited by:
(explanations, 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. Basu, Kaushik & Zarghamee, Homa, 2005. "Is Product Boycott a Good Idea for Controlling Child Labor?," Working Papers 05-14, Cornell University, Center for Analytic Economics. [Downloadable!]
  2. Basu, Kaushik & Felkey, Amanda, 2004. "A Theory of Efficiency Wage with Community-Based Income Sharing," Working Papers 04-10, Cornell University, Center for Analytic Economics. [Downloadable!]
  3. Basu, Kaushik, 2003. "Policy Dilemmas for Controlling Child Labor," Working Papers 03-11, Cornell University, Center for Analytic Economics. [Downloadable!]
  4. Gil S. Epstein & Nava Kahana, 2007. "The Effect of Emigration on Child Labor," IZA Discussion Papers 3025, Institute for the Study of Labor (IZA). [Downloadable!]
  5. Pushkar Maitra & Ranjan Ray, 2000. "The Joint Estimation of Child Participation in Schooling and Employment: Comparative Evidence from Three Continents," ASARC Working Papers 2000-04, Australian National University, Australia South Asia Research Centre. [Downloadable!]
    Other versions:
  6. Sylvain Dessy & Stephane Pallage, 2002. "Fertility, Education, and Market Failures," Cahiers de recherche CREFE / CREFE Working Papers 148, CREFE, Université du Québec à Montréal. [Downloadable!]
  7. Basu, Kaushik & Genicot, Garance & Stiglitz, Joseph E., 2000. "Unemployment and Wage Rigidity When Labor Supply Is a Household Decision," Working Papers 00-10, Cornell University, Center for Analytic Economics. [Downloadable!]
    Other versions:
  8. Sylvain Dessy & Stéphane Pallage, 2003. "The Economics of Child Trafficking," Cahiers de recherche 0323, CIRPEE. [Downloadable!]
  9. Shirit Katav-Herz, 2003. "A Model of Parental Demand for Child Labor with High Fertility Norms," Review of Economics of the Household, Springer, vol. 1(3), pages 219-233, September. [Downloadable!] (restricted)
  10. Kaushik Basu & Pham Hoang Van, 1999. "The Economics of Child Labor: Reply," American Economic Review, American Economic Association, vol. 89(5), pages 1386-1388, December. [Downloadable!] (restricted)
  11. Sylvain Dessy & Stephane Pallage, 2001. "Why Banning the Worst Forms of Child Labour Would Hurt Poor Countries," Cahiers de recherche CREFE / CREFE Working Papers 135, CREFE, Université du Québec à Montréal. [Downloadable!]
    Other versions:
  12. Sylvain E. Dessy & Flaubert Mbiekop & Stéphane Pallage, 2005. "The Economics of Child Trafficking (Part II)," Cahiers de recherche 0509, CIRPEE. [Downloadable!]
  13. Basu, Kaushik & Felkey, Amanda J., 2008. "A Theory of Efficiency Wage with Multiple Unemployment Equilibria: How a Higher Minimum Wage Law Can Curb Unemployment," IZA Discussion Papers 3381, Institute for the Study of Labor (IZA). [Downloadable!]
  14. Drusilla K. Brown & Alan V. Deardorff & Robert M Stern, 2002. "The Effects of Multinational Production on Wages and Working Conditions in Developing Countries," Working Papers 486, Research Seminar in International Economics, University of Michigan. [Downloadable!]
    Other versions:
  15. Sonia R Bhalotra & Chris Heady, 2000. "Child Farm Labour: Theory and Evidence," STICERD - Development Economics Papers 24, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE. [Downloadable!]
  16. Horii, Ryo & Sasaki, Masaru, 2008. "Dual Poverty Trap: Intra- and Intergenerational Linkages in Frictional Labor Markets," MPRA Paper 13484, University Library of Munich, Germany. [Downloadable!]
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