Impact of Social Labeling on Child Labor in the Indian Carpet Industry

Sayan Chakrabarty () and Ulrike Grote

Hannover Economic Papers (HEP) from Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät

Abstract: Does the labeling of tradable products like carpets which have been produced without child labor contribute to decreased vulnerability of poor households and their children? This paper analyzes which factors determine the probability of a child to work in the carpet industry, and examines the influence of non governmental organizations (NGOs) like Rugmark which are engaged in the social labeling process. Data was obtained from interviews with 417 households in North India. Based on their calorie intake, the households were dissected into two groups, one very poor group below and another one above the subsistence level. The econometric analysis shows that a child living in a very poor household is more likely to work when his/her calorie intake increases (nutritional efficiency wage argument), while the opposite is true for a child from the above-subsistence household group. In addition, it has been found that social labeling has no significant influence on the very poor households. In contrast, at the above-subsistence level, social labeling has a significant positive welfare influence on the households. Furthermore, the occurrence of child labor is more likely for NGOs without monitoring.

Keywords: Social Labeling; Child Labor; Carpet Industry; India (search for similar items in EconPapers)
JEL-codes: C81 D13 I20 J22 O12 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2007-05
New Economics Papers: this item is included in nep-cwa, nep-dev and nep-lab
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