Product boycott a good idea for controlling child labor? A theoretical investigation

Kaushik Basu () and Homa Zarghamee ()
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Kaushik Basu: Cornell University
Homa Zarghamee: Santa Clara University, Santa Clara

Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers from Indian Statistical Institute, New Delhi, India

Abstract: A popular form of action to curb child labor and uphold international labor standards in general is a `product boycott' by consumers. There are labeling agencies that inform us if, for instance, a carpet or a hand-stitched soccer ball is free of child labor. The presence of a consumer boycott will typically mean that products tainted by child labor will command a lower price on the market than ones certified to be untainted. It is popularly presumed that such consumer activism is desirable. The paper formally investigates this presumption and shows that consumer product boycotts can, in a wide class of situations, have an adverse reaction that causes child labor to rise rather than fall. This happens under weak and plausible assumptions. Hence, there has to be much greater caution in the use of consumer activism, and one has to have much more detailed information about the context where child labor occurs, before using a boycott.

Keywords: child labor; product boycott; labor standards (search for similar items in EconPapers)
JEL-codes: O12 D10 K00 J20 (search for similar items in EconPapers)
Date: 2008-05
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