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A Note on Multiple General Equilibria with Child Labour

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  • Kaushik Basu

    (Department of Economics, Cornell University)

Abstract

It has been conjectured, using partial equilibrium analysis, that the market for child labour is likely to exhibit multiple equilibria, with children working in some but not in others. Such a result has important policy implications, especially concerning the use of a legislative ban on child labour. This paper shows that the multiple equilibrium result holds in a formal general equilibrium model. The paper develops the concept of a 'wage bill curve' and shows how this is a useful tool for studying the relation between household preference and multiple equilibria. It also clarifies the kind of welfare criteria needed to justify a legislative ban on child labour.

Suggested Citation

  • Kaushik Basu, 2000. "A Note on Multiple General Equilibria with Child Labour," Working Papers 78, Institute for Social and Economic Change, Bangalore.
    • Handle: RePEc:sch:wpaper:78
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    References listed on IDEAS

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    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. Basu, Kaushik, 2000. "The Intriguing Relation between Adult Minimum Wage and Child Labour," Economic Journal, Royal Economic Society, vol. 110(462), pages 50-61, March.
    3. Ranjan, Priya, 2001. "Credit constraints and the phenomenon of child labor," Journal of Development Economics, Elsevier, vol. 64(1), pages 81-102, February.
    4. Ray, Ranjan, 2000. "Child Labor, Child Schooling, and Their Interaction with Adult Labor: Empirical Evidence for Peru and Pakistan," The World Bank Economic Review, World Bank, vol. 14(2), pages 347-367, May.
    5. Basu, Kaushik & Van, Pham Hoang, 1998. "The Economics of Child Labor," American Economic Review, American Economic Association, vol. 88(3), pages 412-427, June.
    6. Kaushik Basu, 1999. "International Labor Standards and Child Labor," Challenge, Taylor & Francis Journals, vol. 42(5), pages 80-93, September.
    7. Carol Ann Rogers & Kenneth A. Swinnerton, 1999. "The Economics of Child Labor: Comment," American Economic Review, American Economic Association, vol. 89(5), pages 1382-1385, December.
    8. Stern, R.M., 2000. "Labor Standards and Trade," Working Papers 457, Research Seminar in International Economics, University of Michigan.
    9. Luis Felipe López Calva, 2002. "A social stigma model of child labor," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 17(2), pages 193-217.
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    Cited by:

    1. Patrick M. Emerson & Vladimir Ponczek & André Portela Souza, 2017. "Child Labor and Learning," Economic Development and Cultural Change, University of Chicago Press, vol. 65(2), pages 265-296.
    2. Mita Bhattacharya, 2007. "Globalisation And Child Labour: Evidence From India," Monash Economics Working Papers 09-07, Monash University, Department of Economics.
    3. 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.
    4. Doytch, Nadia & Thelen, Nina & Mendoza, Ronald U., 2014. "The impact of FDI on child labor: Insights from an empirical analysis of sectoral FDI data and case studies," Children and Youth Services Review, Elsevier, vol. 47(P2), pages 157-167.
    5. Rubiana Chamarbagwala & Rusty Tchernis, 2006. "The Role of Social Norms in Child Labor and Schooling in India," CAEPR Working Papers 2006-016, Center for Applied Economics and Policy Research, Department of Economics, Indiana University Bloomington.
    6. Fabre, Alice & Pallage, Stéphane, 2015. "Child labor, idiosyncratic shocks, and social policy," Journal of Macroeconomics, Elsevier, vol. 45(C), pages 394-411.
    7. Saqib Jafarey & Sajal Lahiri, 2005. "Food for education versus school quality: a comparison of policy options to reduce child labour," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 38(2), pages 394-419, 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. Drusilla K. Brown & Alan V. Deardorff & Robert M. Stern, 2009. "The Effects of Multinational Production on Wages and Working Conditions in Developing Countries," World Scientific Book Chapters, in: Globalization And International Trade Policies, chapter 17, pages 623-687, World Scientific Publishing Co. Pte. Ltd..
    10. Eugenia Fotoniata & Thomas Moutos, 2013. "Product Quality, Informality, and Child Labor," Review of Development Economics, Wiley Blackwell, vol. 17(2), pages 268-283, May.
    11. Patrick M. Emerson & André Portela Souza, 2011. "Is Child Labor Harmful? The Impact of Working Earlier in Life on Adult Earnings," Economic Development and Cultural Change, University of Chicago Press, vol. 59(2), pages 345-385.
    12. Rubiana Chamarbagwala & Rusty Tchernis, 2010. "Exploring the spatial determinants of children’s activities: evidence from India," Empirical Economics, Springer, vol. 39(2), pages 593-617, October.
    13. Sarbajit Chaudhuri & Manash Ranjan Gupta, 2004. "Child Labour and Trade Liberalization," The Japanese Economic Review, Japanese Economic Association, vol. 55(2), pages 201-211, June.
    14. Jean-Pierre Lachaud, 2008. "Le travail des enfants et la pauvreté en Afrique : un réexamen appliqué au Burkina Faso," Economie & Prévision, La Documentation Française, vol. 0(5), pages 47-65.
    15. Ahmed, Syed Shujaat & Haider, Waqas & Khan, Dilawar, 2012. "Determinants of Child Labor in Khyber Pakhtunkhwa: An Econometric Analysis," MPRA Paper 73526, University Library of Munich, Germany.
    16. 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.
    17. Alessandro Cigno, 2024. "Can a ban on child labour be self-enforcing, and would it be efficient?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 37(3), pages 1-15, September.
    18. Polyxeni Kechagia & Theodore Metaxas, 2023. "Capital Inflows and Working Children in Developing Countries: An Empirical Approach," Sustainability, MDPI, vol. 15(7), pages 1-18, April.
    19. Kechagia, Polyxeni & Metaxas, Theodore, 2020. "FDI, child labor and gender issues in Sub – Saharan Africa: an empirical approach," MPRA Paper 104311, University Library of Munich, Germany.
    20. Koolwal, Gayatri & Ray, Ranjan, 2002. "Estimating the endogenously determined intrahousehold balance of power and its impact on expenditure pattern : evidence from Nepal," Policy Research Working Paper Series 2814, The World Bank.
    21. Sarbajit Chaudhuri & Manash Ranjan Gupta, 2005. "Child Labour And Trade Liberalization In A Developing Economy," Labor and Demography 0510017, University Library of Munich, Germany.
    22. Rubiana Chamarbagwala, 2004. "Returns to Education, Child Labor, & Schooling in India," Development and Comp Systems 0410003, University Library of Munich, Germany.
    23. Chakrabarty, Sayan & Grote, Ulrike, 2009. "Child Labor in Carpet Weaving: Impact of Social Labeling in India and Nepal," World Development, Elsevier, vol. 37(10), pages 1683-1693, October.

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    Keywords

    Child Labour;

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