Child Labor and Coordination Failures

Sylvain Dessy () and Stephane Pallage

No 109, Cahiers de recherche CREFE / CREFE Working Papers from CREFE, Université du Québec à Montréal

Abstract: In this paper, we show how coordination failures may explain the prevalence of child labor in developing countries. We do so within a simple game-theoretic setup. Child labor arises in our environment because of the lack of a coordination mechanism between parental decisions to invest in the human capital of their children and firm's decisions to invest in skill-intensive technology. Governmental policies that help coordinate expectations lead to the disappearance of child labor.

Keywords: Child labor; welfare; equilibrium selection; coordination (search for similar items in EconPapers)
JEL-codes: I20 J20 D60 O30 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge, nep-edu, nep-lab and nep-pbe
Date: Written 2000-03
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Published (latest version) in Journal of Development Economics, 65/2, June 2001, 469-476

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Related works:
Journal Article: Child labor and coordination failures (2001)
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