A Theory of Exploitative Child Labor

Carol Rogers & Kenneth A. Swinnerton ()
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Carol Rogers & Kenneth A. Swinnerton: Department of Economics, Georgetown University
Authors registered in the RePEc Author Service: Kenneth Swinnerton ()

Working Papers from Georgetown University, Department of Economics

Abstract: We develop a model of exploitative child labor with two key features: first, parents have imperfect information about whether employment opportunities available to their children are exploitative or not. Second, firms choose whether or not to exploit their child workers. In our model, a ban on exploitative child labor is desirable, because it resolves the problem of imperfect information faced by parents, and therefore leads to Pareto efficiency. We also find that a ban leads to an increase in the wages of child workers, and that firm profits, even for firms that do not exploit child workers, fall. Finally, a ban has ambiguous effects at the macroeconomic level: aggregate child employment and aggregate output can rise or fall.

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Related works:
Working Paper: A Theory of Exploitative Child Labor (2003)
Working Paper: A Theory of Exploitative Child Labor (2005)
Journal Article: A theory of exploitative child labor (2008)
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