Unintended consequences of trade integration on child labor

We reassess the impact of greater trade integration on child labor by using a unique database for Brazil where import and export shocks originating from China are allowed to affect child labor through local labor market outcomes. Contrary to existing results in that trade liberalization in developing countries is associated with less child labor regardless the type of trade shock, we find that increases in exports are associated with less child labor whereas increases in imports are related to more child labor. Our results suggest that trade liberalization in Brazil over the 2000 to 2010 period was not necessarily a winner-winner event as locations more exposed to positive variations of imports from China also experienced more poverty and child labor relative to less exposed locations. These findings provide insights into the regional effects of trade, and may have important implications for policies that address child labor.