Trade and child labor: a general equilibrium analysis

Subhayu Bandyopadhyay and Sudeshna C. Bandyopadhyay

No 2007-024, Working Papers from Federal Reserve Bank of St. Louis

Abstract: This paper augments the existing literature on trade and child labor by exploring the effects of terms of trade changes in the context of a three good general equilibrium model, where one of the goods is a non-traded good. We find that under quasi-linear preferences the effect of the terms of trade on child labor depends critically on the pattern of substitutability (or complimentarity) in the excess demand functions between the export good and the non-traded good. We extend the analysis to the case where factors move freely between the three goods as in a Heckscher-Ohlin type framework. Finally, we show that a balanced budget policy of taxing the education of skilled families and subsidizing the education of unskilled families must reduce child labor without any impact on aggregate welfare.

Keywords: Child labor; Balance of payments (search for similar items in EconPapers)
Date: 2007
New Economics Papers: this item is included in nep-dev, nep-int and nep-lab
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Related works:
Journal Article: Trade and Child Labor: A General Equilibrium Analysis (2009)
Working Paper: Trade and Child Labor: A General Equilibrium Analysis (2005)
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