MINAS ARTESANALES DE LA COMUNIDAD EL CORAZÓN

Most potential workers live in multimember households. If we are willing to assume that a single decision maker within the household (or the entire household acting unanimously) makes a joint choice about the allocation of every member’s time, then we can analyze such choices by treating home time for each member as a separate good that the household values consuming. (We will point out some inadequacies of this view of multimember households in Chapter 7.) This suggests that:

If a household considers a particular member’s nonwork time (including time in school) to be a normal good, then that member’s nonwork time will rise when the household’s nonlabor income or time endowment rises and when wages faced by other household members rise (increasing household full income). An increase in the person’s own wage can reduce or increase his home time, depending on whether the substitution effect of this wage change outweighs the income effect.

6.3C

Child labor

Familiarity with the basic labor supply model, and with economic logic more generally, helps us to identify and question three assumptions implicit in many calls for child labor prohibi- tions: that children are put to work by selfish decision makers who do not take the children’s welfare fully into account, that children go to school if and only if they do not work, and that laws prohibiting child labor would be effective in eliminating all opportunities for children to work.

The basic labor supply model raises the possibility that parents put their children to work, even when they care deeply about their children’s well-being, because the income from child labor provides children with food and other necessities, and the parents judge that these benefits outweigh the costs. If this is the case, eliminating child labor opportunities could leave children worse off.

Careful thought about time allocation choices furthermore raises the possibility that chil- dren might attend school even when they also work, and they might fail to attend school even when they do not work. Thus child labor prohibitions need not raise school attendance even if they successfully reduce child labor.

Economic logic more generally suggests that child labor prohibitions will be effective only if employers of children perceive a significant threat of detection and punishment for noncom- pliance. Child labor prohibitions may thus have little impact if it is costly and difficult to monitor and punish the employers of child labor.

The basic labor supply model also points to a wide array of alternative policies that might reduce child labor and that are more likely to raise child welfare and school enrollment rates than child labor prohibitions. These include efforts to raise family incomes, improve the rewards for schooling, reduce the cost of schooling, and reduce the time families must spend collecting water and fuel.

Motivated by these concerns, economists have generated a large body of empirical research on the causes and consequences of child labor. For an excellent review, see Edmonds (2008). Here we highlight just a few of the insights revealed by empirical study. We draw on Table 6.1, which presents a small subset of the household survey statistics assembled in Edmonds (2008). In the table, a child is recorded as engaged in a work activity if he or she devoted at least one hour to it in the last week. Children are identified as attending school if they have attended school in the

last year.“Market work inside the home” involves production of goods and services on a family farm or in a family business. “Market work outside the home” involves work for pay for employers outside the home.“Domestic work” includes cooking, cleaning, carrying water, caring for siblings, and similar activities. Children are recorded as involved in“any work” if they are involved in any of these three work activities.

The definition of child work in Table 6.1 is somewhat broader than the ILO definition, which itself is very broad. The ILO counts as child laborers all children younger than 12 years who work at least one hour per week and children 12 to 14 years who work at least 14 hours per week in the production of goods and services. They also include children younger than 14 years involved in hazardous work and children younger than 18 years involved in“unconditional worst forms of child labor,” which include forced labor, prostitution, armed conflict, and other illicit activities. The definition excludes children involved in domestic work, even when this absorbs many hours per day.

Afirst insight from empirical study is that most of the work that absorbs children’s time in developing countries involves work on family farms, in family businesses, or in household chores, often working side by side with parents who are doing the same work. The first four columns of Table 6.1 indicate that market work inside the home and domestic work are much more common than market work outside the home. Other data sources document that large fractions of child market work are in agriculture, forestry, and fishing, but only a very small fraction is in manufacturing. This suggests that:

Much child labor takes place in the children’s homes or on farms and is thus likely to be outside the range of effective enforcement for child labor prohibitions.

The ILO estimates that 8.4 million children (a small fraction of all child laborers) are involved in the unconditional worst forms of child labor (ILO, 2002). Such activities demand attention, but they, too, are unlikely to be curtailed by standard approaches to enforcing child labor prohibitions.

A second insight from empirical study is that schooling is not generally incompatible with work. Table 6.1 reveals that the majority of working children attend school. This is possible because many working children are engaged in fewer than 10 hours of market work per week (see Figure 1 in Edmonds, 2008). Furthermore, in the countries in which larger fractions of working children do not attend school, large fractions of nonworking children also remain out of school (see Table 6.1), suggesting that obstacles other than child labor may be more important in pre- venting school attendance. Thus:

Even if child labor prohibitions are effective in reducing child labor, they need not increase the schooling of child workers by as much as they reduce their labor.

▪

Country Any Work Market Work Outside Home Market Work Inside Home Domestic Work School

Any Work and No School No Work and No School Albania 62.7 3.5 29.5 56.1 54.7 32.6 12.7 Cameroon 85.2 30.8 42.7 81.1 94.5 5.0 0.4 Kenya 66.8 2.2 1.0 66.3 95.9 2.8 1.0 Mongolia 91.7 1.4 20.6 91.2 95.2 4.6 0.2 Venezuela 64.6 4.5 3.9 62.4 92.0 3.8 4.2 Vietnam 57.8 1.9 23.4 51.7 95.1 4.3 0.6 Source: Edmonds (2008).

In some cases, work by older siblings also appears to help cover the cost of sending younger siblings to school, and thus effective child labor prohibitions might even cause enrollment rates to decline by causing the siblings of child workers to drop out of school (Edmonds, 2008).

Third, child laborers tend to live in poor households and sometimes make a significant contribution to family income. Cross-country studies demonstrate that child labor is more prevalent in poorer countries, and studies that follow families over time often find that child participation in work rises significantly when the household is hit by an economic downturn, such as a crop failure or the loss of the household head’s job (Beegle et al., 2006; Duryea et al., 2007). Studies estimate that labor by 13-year-olds contributed 13 percent of household income in Bolivia (Psacharopoulos, 1997) and that children in Nepal contribute 11 percent to the value of family agricultural production (Menon et al., 2005). Thus:

Poverty can lead parents to put children to work, even when they take the children_{’s welfare fully into account.} Under such circumstances, eliminating children_{’s contribution to family income can significantly reduce the} households_{’ ability to provide children and other family members with basic necessities.}

Fourth, increases in family income (all else equal) tend to reduce child labor and increase schooling. Estimation of the effect of household income growth on child labor and schooling is complicated, because the forces that cause household incomes to rise often simultaneously raise the wages children could earn in child labor. The increase in household income tends to reduce child labor if child home time is a normal good (an income effect). The increase in child labor wages induces both an income effect that tends to reduce child labor and a substitution effect that tends to increase it, implying a net wage effect that may be positive or negative but that we might often guess would be positive, as described above. It is difficult to distinguish the income and wage effects, and the net effect may differ from place to place. In Brazil, a coffee boom that raised both income and wages brought an increase in child labor. As Kruger (2007) points out, the wage effect may have been especially strong in this case, because the coffee boom was expected to be temporary, and families expected children to return to school after the boom ended (thus the opportunity cost of temporary work was perceived to be quite low). Many parents of child laborers also owned no land and thus enjoyed no direct income gain from the increased coffee prices. In Vietnam, however, trade reform–driven increases in rice prices, in the presence of an unusually egalitarian distribution of rice farming land, led to widespread household income increases, including among many poor households. This gave rise to income responses that outweighed the wage responses and caused child labor to diminish (Edmonds and Pavcnik, 2006). See Box 6.2. Thus:

In at least some contexts, rising household incomes appear to reduce child labor, but rising incomes are often associated with rising child wages, which can create countervailing pressure for child labor to increase. The net effect varies from context to context.

Fifth, empirical evidence also suggests that improvements in the benefits of schooling and reductions in the cost of schooling can raise school enrollment and, perhaps to a lesser extent, reduce child labor. For example, Foster and Rosenzweig (1996) argue that introduction of high- yielding rice varieties raised the returns to education in rural India and that where these returns rose the most, school enrollments rose the most. Kochar (2004) demonstrates that rural school enrollment is higher where returns to schooling are higher in nearby urban areas. Case and Yogo (1999) show that where pupil-to-teacher ratios are lower (and school quality is thus presumably higher) black children in South Africa are more likely to attend school, and Shafiq (2007) shows that boys are more likely to attend school and less likely to work where the costs of schooling are

lower in Bangladesh. School enrollment rates also tend to rise when road construction projects reduce the time cost and difficulty of walking to school.

Sixth, conditional cash transfer programs (CCTs), which simultaneously increase house- hold income (inducing an income effect) and raise the net return to education relative to child labor (inducing a substitution effect in favor of schooling), seem to be particularly effective in raising enrollments for children in some circumstances. These programs raise household income by providing cash transfers, and they raise the net returns to education (relative to child labor) by allowing households to collect benefits only when their children are attending school regularly. Mexico’s Progresa/Opportunidades CCT is considered very successful in raising school enroll- ment rates, especially among older children for whom school enrollment rates were not very high before the program. Schultz (2004) shows that for households eligible to participate in the pro- gram, children’s wage and market work declined (though by less than school enrollment increased), and Skoufias and Parker (2001) show that domestic work for girls declined. de Janvry et al. (2006) show that Progresa transfers prevented families from withdrawing children from school when bad weather reduced family agricultural incomes, but it did not prevent children

Box 6.2 The Impacts of Rice Price Increases on Child Labor in Vietnam