Is Child Labor Inefficient?

Posted: 7 Sep 2001

See all articles by Jean-Marie Baland

Jean-Marie Baland

Facultés Universitaires Notre-Dame de la Paix (FUNDP)

James A. Robinson

Harvard University - Department of Government; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Abstract

We build a model of child labor and study its implications for welfare. We assume that there is a trade-off between child labor and the accumulation of human capital. Even if parents are altruistic and child labor is socially inefficient, it may arise in equilibrium because parents fail to fully internalize its negative effects. This occurs when bequests are zero or when capital markets are imperfect. We also study the effects of a simple ban on child labor and derive conditions under which it may be Pareto improving in general equilibrium. We show that the implications of child labor for fertility are ambiguous.

JEL Classification: J13, J24

Suggested Citation

Baland, Jean-Marie and Robinson, James A., Is Child Labor Inefficient?. Available at SSRN: https://ssrn.com/abstract=235387

Jean-Marie Baland (Contact Author)

Facultés Universitaires Notre-Dame de la Paix (FUNDP) ( email )

8 Rempart de la Vierge
B-5000 Namur
Belgium

James A. Robinson

Harvard University - Department of Government ( email )

1737 Cambridge Street
Cambridge, MA 02138
United States
617-496-2839 (Phone)
617-495-8292 (Fax)

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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