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Child Labor and Resistance to Change

Author

Listed:
  • Giorgio Bellettini

    (University of Bologna)

  • Carlotta Berti Ceroni

    (University of Bologna)

  • Gianmarco I.P. Ottaviano

    (University of Bologna and CEPR)

Abstract

We study the interactions between technological innovation, investment in human capital and child labor. In our setting new technologies require new skills and new skills can be developed only through schooling. In a two-stage game, first firms decide on innovation, then households decide on education. In equilibrium the presence of inefficient child labor depends on parameters related to technology, parents’ altruism and the diffusion of firm property. When child labor exists, it is due to either firms reluctance to innovate or households’ unwillingness to educate or both. The optimal policy to eliminate child labor depends crucially on its underlying cause. We show that, in some cases, compulsory schooling laws or a ban on child labor are welfare reducing, while a subsidy to innovation is the right tool to eliminate child labor and increase welfare.

Suggested Citation

  • Giorgio Bellettini & Carlotta Berti Ceroni & Gianmarco I.P. Ottaviano, 2003. "Child Labor and Resistance to Change," Working Papers 2003.79, Fondazione Eni Enrico Mattei.
    • Handle: RePEc:fem:femwpa:2003.79
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    References listed on IDEAS

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    Cited by:

    1. Burhan, Nik Ahmad Sufian & Sidek, Abdul Halim & Ibrahim, Saifuzzaman, 2016. "Eradicating the Crime of Child Labour in Africa: The Roles of Income, Schooling, Fertility, and Foreign Direct Investment," MPRA Paper 77250, University Library of Munich, Germany.

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    More about this item

    Keywords

    Child labor; Innovation;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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