Child labor has a dark history around the world.
But banning child labor outright may not work in countries with systemic, widespread poverty and no social security programs to help out poor families in dire straits.
This is according to a new NBER study by Prashant Bharadwaj of UCSD, Leah Lakdawal of Michigan State University and Nicholas Li of the University of Toronto.
The study uses data from India, a country where the problem of child labor is particularly egregious. According to official estimates, the number of child laborers between the ages of 5 and 14 lay at nearly 5 million in 2010. In 1986, India instituted a ban on child labor through the Child Labor (Prohibition and Regulation) Act, which sought to ban children under the age of 14 being employed in “hazardous” occupations, which included construction work, some factory work and work in automobile garages. It also restricted the number of hours children could work in “non-hazardous” occupations, such as food service.
The ban’s intended effect was to make it riskier, and hence more costly for employers to employ child labor.
But the only people sending their children out to work were the poorest and most desperate families who had no other means of reaching a minimum level of subsistence. Employers took advantage of this desperation and responded by cutting the wages they would pay a child laborer as a means of passing on the higher cost of the risk of employing them. Families that would earlier have sent only one of their children to work, were now forced to send more of their young children into the workforce. The fall in child wages due to the ban actually led to an increase in child labor.
The research found that child labor increased 12.5% over the pre-ban average, and the likelihood of a business employing a child versus employing an older person increased by 1.7 to 1.9 percentage points.
Additionally, for the households most affected by the ban, there was a nearly one-to-one correlation with a reduction in the schooling their children received.
However, the paper only looks at the immediate impact of the ban on child labor and not the long-term benefits. Since 1981, when child labor stood at over 13 million, the number has now fallen to 5 million.
Read the whole paper at NBER.org.