The Role of Trade and Offshoring in the Determination of Child Labour

Alessandro Cigno, Giorgia Giovannetti () and Laura Sabani

No 8878, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Incorporating family decisions in a two-period-model of the world economy, we show that trade liberalization may reduce child labour in developing countries where the initial share of skilled workers in the adult workforce – though not as large as in developed countries – is nonetheless large enough to attract skill-intensive FDI from the latter. If the production activities so relocated are more skill-intensive than those carried out in the destination countries before liberalization, that will in fact tend to offset the downwards pressure on the ratio of skilled to unskilled wage rates (Stolper-Samuelson effect), and thus on the incentive for parents to invest in their children's education, associated with international specialization. The hypothesis is not rejected by the data, and thus helps to explain why child labour has not risen in all developing countries, but risen in some and fallen in others.

Keywords: skill premium; skill endowment; FDI; trade barriers; school enrolment; child labour (search for similar items in EconPapers)
JEL-codes: D13 D33 F16 J13 J24 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2015-02
New Economics Papers: this item is included in nep-dem and nep-int
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Published - published in: Journal of International Trade and Economic Development, 2018, 27, 267 - 292.

Downloads: (external link)
https://docs.iza.org/dp8878.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp8878

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().