IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/30908.html
   My bibliography  Save this paper

Child Labor Standards in Regional Trade Agreements: Theory and Evidence

Author

Listed:
  • Ryan M. Abman
  • Clark C. Lundberg
  • John McLaren
  • Michele Ruta

Abstract

We study the impact of child labor standards in Regional Trade Agreements (RTAs) on a variety of child labor market outcomes, including employment, education, and household inequality. We develop a stylized general equilibrium model of child labor in an economy open to international trade and consider the impact of RTAs with and without child labor bans. We empirically investigate the effects of these clauses in trade agreements in a broad international panel of 101 developing countries using harmonized survey microdata. Exploiting quasi-experimental methods to obtain plausibly causal estimates, we find that RTAs without child-labor bans lead to reductions in child employment and increases in school enrollment, particularly for older children aged 14--17. Child labor bans in RTAs perversely increase child employment among 14--17 year olds and decrease school enrollment for both young and older children. These effects appear to decrease inter-household income inequality through increased child earnings. Our findings are consistent with theoretical predictions from our model and the literature on child labor bans.

Suggested Citation

  • Ryan M. Abman & Clark C. Lundberg & John McLaren & Michele Ruta, 2023. "Child Labor Standards in Regional Trade Agreements: Theory and Evidence," NBER Working Papers 30908, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:30908
    Note: DEV ITI
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w30908.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. 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.
    2. Edmonds, Eric V. & Pavcnik, Nina, 2006. "International trade and child labor: Cross-country evidence," Journal of International Economics, Elsevier, vol. 68(1), pages 115-140, January.
    3. Céline Carrère & Marcelo Olarreaga & Damian Raess, 2022. "Labor clauses in trade agreements: Hidden protectionism?," The Review of International Organizations, Springer, vol. 17(3), pages 453-483, July.
    4. Dmitry Arkhangelsky & Susan Athey & David A. Hirshberg & Guido W. Imbens & Stefan Wager, 2021. "Synthetic Difference-in-Differences," American Economic Review, American Economic Association, vol. 111(12), pages 4088-4118, December.
    5. 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.
    6. Eric V. Edmonds & Nina Pavcnik & Petia Topalova, 2010. "Trade Adjustment and Human Capital Investments: Evidence from Indian Tariff Reform," American Economic Journal: Applied Economics, American Economic Association, vol. 2(4), pages 42-75, October.
    7. Aaditya Mattoo & Nadia Rocha & Michele Ruta & Aaditya Mattoo, 2020. "Handbook of Deep Trade Agreements," World Bank Publications - Books, The World Bank Group, number 34055.
    8. Juan Camilo Cardenas & Jeffrey Carpenter, 2008. "Behavioural Development Economics: Lessons from Field Labs in the Developing World," Journal of Development Studies, Taylor & Francis Journals, vol. 44(3), pages 311-338.
    9. Baghdadi, Leila & Martinez-Zarzoso, Inmaculada & Zitouna, Habib, 2013. "Are RTA agreements with environmental provisions reducing emissions?," Journal of International Economics, Elsevier, vol. 90(2), pages 378-390.
    10. David Atkin, 2016. "Endogenous Skill Acquisition and Export Manufacturing in Mexico," American Economic Review, American Economic Association, vol. 106(8), pages 2046-2085, August.
    11. Mahmud Yesuf & Randall A. Bluffstone, 2009. "Poverty, Risk Aversion, and Path Dependence in Low-Income Countries: Experimental Evidence from Ethiopia," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(4), pages 1022-1037.
    12. Greenland, Andrew & Lopresti, John, 2016. "Import exposure and human capital adjustment: Evidence from the U.S," Journal of International Economics, Elsevier, vol. 100(C), pages 50-60.
    13. Basu, Kaushik & Van, Pham Hoang, 1998. "The Economics of Child Labor," American Economic Review, American Economic Association, vol. 88(3), pages 412-427, June.
    14. Basu, Kaushik, 2005. "Child labor and the law: Notes on possible pathologies," Economics Letters, Elsevier, vol. 87(2), pages 169-174, May.
    15. Prashant Bharadwaj & Leah K Lakdawala & Nicholas Li, 2020. "Perverse Consequences of Well Intentioned Regulation: Evidence from India’s Child Labor Ban," Journal of the European Economic Association, European Economic Association, vol. 18(3), pages 1158-1195.
    16. Baier, Scott L. & Bergstrand, Jeffrey H., 2007. "Do free trade agreements actually increase members' international trade?," Journal of International Economics, Elsevier, vol. 71(1), pages 72-95, March.
    17. Peter Egger & Mario Larch & Kevin E. Staub & Rainer Winkelmann, 2011. "The Trade Effects of Endogenous Preferential Trade Agreements," American Economic Journal: Economic Policy, American Economic Association, vol. 3(3), pages 113-143, August.
    18. Josh Ederington, 2002. "Trade and Domestic Policy Linkage in International Agreements," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(4), pages 1347-1368, November.
    19. Baier, Scott L. & Bergstrand, Jeffrey H. & Feng, Michael, 2014. "Economic integration agreements and the margins of international trade," Journal of International Economics, Elsevier, vol. 93(2), pages 339-350.
    20. Bergstrand, Jeffrey H. & Larch, Mario & Yotov, Yoto V., 2015. "Economic integration agreements, border effects, and distance elasticities in the gravity equation," European Economic Review, Elsevier, vol. 78(C), pages 307-327.
    21. Abman, Ryan & Lundberg, Clark & Szmurlo, Daniel, 2022. "Trade, Emissions, and Environmental Spillovers: Issue Linkages in Regional Trade Agreements," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322511, Agricultural and Applied Economics Association.
    22. Ryan Abman & Clark Lundberg, 2020. "Does Free Trade Increase Deforestation? The Effects of Regional Trade Agreements," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 7(1), pages 35-72.
    23. Blanchard, Emily J. & Olney, William W., 2017. "Globalization and human capital investment: Export composition drives educational attainment," Journal of International Economics, Elsevier, vol. 106(C), pages 165-183.
    24. Brandi, Clara & Schwab, Jakob & Berger, Axel & Morin, Jean-Frédéric, 2020. "Do environmental provisions in trade agreements make exports from developing countries greener?," World Development, Elsevier, vol. 129(C).
    25. Maskus, Keith E., 1997. "Should core labor standards be imposed through international trade policy?," Policy Research Working Paper Series 1817, The World Bank.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Alzate, David & Carranza, Eliana & Duran-Franch, Joana & Packard, Truman & Proffen, Celina, 2024. "How Regulations Impact the Labor Market: A Review of the Literatures on Product and Labor Market Regulations," IZA Discussion Papers 17536, Institute of Labor Economics (IZA).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ryan Abman & Clark Lundberg & Michele Ruta, 2024. "The Effectiveness of Environmental Provisions in Regional Trade Agreements," Journal of the European Economic Association, European Economic Association, vol. 22(6), pages 2507-2548.
    2. Jacopo Timini & Nicola Cortinovis & Fernando López Vicente, 2022. "The heterogeneous effects of trade agreements with labour provisions," The World Economy, Wiley Blackwell, vol. 45(9), pages 2820-2853, September.
    3. Francois, Joseph & Hoekman, Bernard & Manchin, Miriam, 2022. "Pursuing Environmental and Social Objectives through Trade Agreements," Papers 1377, World Trade Institute.
    4. Eric V. Edmonds & Nina Pavcnik & Petia Topalova, 2010. "Trade Adjustment and Human Capital Investments: Evidence from Indian Tariff Reform," American Economic Journal: Applied Economics, American Economic Association, vol. 2(4), pages 42-75, October.
    5. Edmonds, Eric V., 2008. "Child Labor," Handbook of Development Economics, in: T. Paul Schultz & John A. Strauss (ed.), Handbook of Development Economics, edition 1, volume 4, chapter 57, pages 3607-3709, Elsevier.
    6. Lou, Jing & Li, Jie, 2022. "Export expansion and intergenerational education mobility: Evidence from China," China Economic Review, Elsevier, vol. 73(C).
    7. Faqin Lin, 2022. "Agriculture exports, child labor and youth education: Evidence from 68 developing countries," Review of International Economics, Wiley Blackwell, vol. 30(2), pages 490-513, May.
    8. Neumayer, Eric & de Soysa, Indra, 2005. "Trade Openness, Foreign Direct Investment and Child Labor," World Development, Elsevier, vol. 33(1), pages 43-63, January.
    9. Prashant Bharadwaj & Leah K Lakdawala & Nicholas Li, 2020. "Perverse Consequences of Well Intentioned Regulation: Evidence from India’s Child Labor Ban," Journal of the European Economic Association, European Economic Association, vol. 18(3), pages 1158-1195.
    10. Bai, Jie & Wang, Yukun, 2020. "Returns to work, child labor and schooling: The income vs. price effects," Journal of Development Economics, Elsevier, vol. 145(C).
    11. Hoekman, Bernard & Santi, Filippo & Shingal, Anirudh, 2023. "Trade effects of non-economic provisions in trade agreements," Economics Letters, Elsevier, vol. 226(C).
    12. Li, Bingjing, 2018. "Export expansion, skill acquisition and industry specialization: evidence from china," Journal of International Economics, Elsevier, vol. 114(C), pages 346-361.
    13. Zhao, Liqiu & Wang, Fei & Zhao, Zhong, 2021. "Trade liberalization and child labor," China Economic Review, Elsevier, vol. 65(C).
    14. Soumya Sahin & Ambar Nath Ghosh, 2016. "Effect of Ban on Exports Containing Child Labour in a Dynamic Model in Presence of Imperfect Monitoring," Foreign Trade Review, , vol. 51(1), pages 26-45, February.
    15. Cristian Ugarte & Marcelo Olarreaga & Gady Saiovici, 2023. "Child labour and global value chains," The World Economy, Wiley Blackwell, vol. 46(4), pages 941-968, April.
    16. Weidner, Martin & Zylkin, Thomas, 2021. "Bias and consistency in three-way gravity models," Journal of International Economics, Elsevier, vol. 132(C).
    17. Olivier Bargain & Delphine Boutin, 2021. "Minimum Age Regulation and Child Labor: New Evidence from Brazil," The World Bank Economic Review, World Bank, vol. 35(1), pages 234-260.
    18. Rod Falvey & Neil Foster-McGregor, 2022. "The breadth of preferential trade agreements and the margins of exports," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 158(1), pages 181-251, February.
    19. Prashant Bansode, 2013. "Perverse Consequences of Well Intentioned Regulation: Evidence from India's Child Labor Ban," Working Papers id:5555, eSocialSciences.
    20. Brandi, Clara & Schwab, Jakob & Berger, Axel & Morin, Jean-Frédéric, 2020. "Do environmental provisions in trade agreements make exports from developing countries greener?," World Development, Elsevier, vol. 129(C).

    More about this item

    JEL classification:

    • F66 - International Economics - - Economic Impacts of Globalization - - - Labor
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:30908. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.