Banning Child Labour Means The Kids Get Paid Less
IF we repealed the laws that ban child labour here in the UK then what do we think would happen to the number of children forced into going to work? Correct, pretty much nothing: almost no one wants to send their children to work and alomst no one wants to employ children.
However, we do also think that child labour is a pretty bad thing and we also argue that other places, other poorer places, should ban child labour as well. And things might not work out the same way elsewhere. For it can happen that if you ban child labour then the amount of child labour goes up, not down:
In this paper, we examine the consequences of India’s landmark legislation against child labor, the Child Labor (Prohibition and Regulation) Act of 1986. Using data from employment surveys conducted before and after the ban, and using age restrictions that determined who the ban applied to, we show that child wages decrease and child labor increases after the ban. These results are consistent with a theoretical model building on the seminal work of Basu and Van (1998) and Basu (2005), where families use child labor to reach subsistence constraints and where child wages decrease in response to bans, leading poor families to utilize more child labor.
A ban on child labour makes it more expensive to employ those children: because there’s the risk of getting caught and fined. OK, so if you make it more expensive to employ children then the wages they kiddies are paid will fall. But those families really, really, need the money the kids are bringing in. So, because child wages fall therefore more children are sent out to work for longer hours.
It’s an interesting example of the basic fact that what you want a law or regulation to do isn’t necessarily what that law or regulation will actually achieve.
Oh, and by the way, more rigorous enforcement of the law isn’t going to help. That will just increase the expense of employing children by increasing the risk, pushing down wages more and leading to parents sending even more of their brood out to work for even more hours.
Posted: 8th, November 2013 | In: Money, Reviews Comment | TrackBack | Permalink
