Child Labor and Globalization

The article embeds child labor in a standard general equilibrium, two‐sector model of a small open economy facing perfectly competitive markets, efficiency wages, and free trade. The modern sector uses skilled adult labor and capital, and the agrarian sector uses unskilled (child and adult) labor an...

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Bibliographic Details
Published in:Journal of labor economics 2007-07, Vol.25 (3), p.553-579
Main Authors: Dinopoulos, Elias, Zhao, Laixun
Format: Article
Language:English
Subjects:
Adults
Child labor
Child labour
Children
Demand for highly skilled workers
Economic models
Economic statistics
Economic theory
Efficiency wages
Employment
Equilibrium models
Foreign direct investment
General economic equilibrium
Globalization
International trade
Labor
Labor economics
Labour economics
Labour force
Modeling
Studies
Wages
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Summary:The article embeds child labor in a standard general equilibrium, two‐sector model of a small open economy facing perfectly competitive markets, efficiency wages, and free trade. The modern sector uses skilled adult labor and capital, and the agrarian sector uses unskilled (child and adult) labor and skilled adult labor. Trade policies, foreign direct investment, or both that increase the modern‐sector output reduce the incidence of child labor. Emigration of skilled (unskilled) workers reduces (increases) the incidence of child labor. Child‐wage subsidies increase the incidence of child labor, and a ban on child labor benefits unskilled adult workers but hurts skilled workers.
ISSN:0734-306X
1537-5307
DOI:10.1086/513297