Household composition and the response of child labor supply to product market integration: evidence from Vietnam

Market integration raises the relative price of a community's export product. The author examines how the response of child labor supply to an increase in the relative price of a primary export product varies with a child's household composition. The specific context for his study is the liberalization of rice markets in Vietnam in the 1990s. Between 1993 and 1998, Vietnam lifted export restrictions on rice, allowing the domestic price to rise toward international levels, and eliminated internal restrictions on the flow of rice between regions of Vietnam. So, the relative price of rice increased overall in Vietnam, but the degree of price change varied across communities with the lifting of restrictions on internal flows. The author finds that the response of child labor supply to rice price increases is increasing the amount of time children work. Thus, household composition attributes that are associated with higher levels of child labor are also associated with larger declines in child labor with rice price increases. The results are consistent with girls particularly benefiting from product market integration because they work more than boys do. The results suggest that economic factors associated with economic reform may attenuate differences in the activities of siblings that are typically associated with cultural traditions and norms.Children and Youth,Labor Policies,Environmental Economics&Policies,Health Economics&Finance,Markets and Market Access,Children and Youth,Youth and Governance,Access to Markets,Street Children,Environmental Economics&Policies

Child Labor

In recent years, there has been an astonishing proliferation of empirical work on child labor. An Econlit search of keywords "child lab*r" reveals a total of 6 peer reviewed journal articles between 1980 and 1990, 65 between 1990 and 2000, and 143 in the first five years of the present decade. The purpose of this essay is to provide a detailed overview of the state of the recent empirical literature on why and how children work as well as the consequences of that work. Section 1 defines terms commonly used in the study of child time allocation and provides a descriptive overview of how children spend their time in low income countries today. Section 2 reviews the case for attention to the most common types of work in which children participate, focusing on that work's impact on schooling, health, as well as externalities associated with that work. Section 3 considers the literature on the determinants of child time allocation such as the influence of local labor markets, family interactions, the net return to schooling, and poverty. Section 5 discusses the limited evidence on different policy options aimed at influencing child labor. Section 6 concludes by emphasizing important research questions requiring additional research such as child and parental agency, the effectiveness of child labor policies, and the determinants of participation in the "worst forms" of child labor.

Child labor in transition in Vietnam

Vietnam experienced a dramatic decline in child labor during the 1990s. The authors explore this decline in detail and document the heterogeneity across households in both levels of child labor and in the incidence of this decline in child labor. Theauthors find a strong correlation between living standards improvements and child labor so that much of the variation in declines in child labor can be explained by variation in living standards improvements. Ethnic minority children and the children of recent migrants appear to remain particularly vulnerable even by the late 1990s. Children of all ethnicities in the Central Highlands appear to have missed many of the improvements in the 1990s, while children in the rural Mekong and in Provincial Towns have experienced the largest declines in child labor. The results suggest embedding efforts against child labor within an overall antipoverty program. The authors find that the opening or closing of household enterprises seems to be associated with increases in child labor. So attention should be devoted to the activities of children in the government's current program to stimulate nonfarm enterprises.Public Health Promotion,Children and Youth,Work&Working Conditions,Primary Education,Health Monitoring&Evaluation,Primary Education,Work&Working Conditions,Youth and Governance,Street Children,Children and Youth

Does Globalization Increase Child Labor? Evidence from Vietnam

This paper considers the impact of liberalized trade policy on child labor in a developing country. While trade liberalization entails an increase in the relative price of the exported product, trade theory provides ambiguous predictions on how this price change affects the incidence of child labor. In this paper, we exploit regional and intertemporal variation in the real price of rice to examine the relationship between price movements of a primary export and the economic activities of children. Using a panel of Vietnamese households, we find that reductions in child labor are increasing with rice prices. Declines in child labor are largest for girls of secondary school age, and we find a corresponding increase in school attendance for this group. Overall, rice price increases can account for almost half of the decline in child labor that occurs in Vietnam in the 1990s. Greater market integration, at least in this case, appears to be associated with less child labor. Our results suggest that the use of trade sanctions on exports from developing countries to eradicate child labor is unlikely to yield the desired outcome.

Product market integration and household labor supply in a poor economy: evidence from Vietnam

This report considers how product market integration in a country's primary agricultural export alters the economic activities of men and women in a poor economy. Between 1993 and 1997, Vietnam relaxed its rice export quota and freed internal restrictions on the trade of rice across regions. These reforms contributed to an almost 30 percent increase in the real price of rice. Using a panel of rural Vietnamese communities that spans the period of policy change,the authors relate the regional and intertemporal variation in the price of rice to changes in the economic activities of children, young adults, and adults by gender. They find that higher rice prices are associated with lower participation in wage work by boys, girls, and young adults, and lower participation in household production by adults. Moreover, higher rice prices are associated with less time devoted to household production for all age groups and adults devoting more hours to wage work. Finally, with the exception of children, labor market responses to changes in rice prices mostly do not differ statistically for males and females.Environmental Economics&Policies,Labor Policies,Economic Theory&Research,Health Economics&Finance,Markets and Market Access,Environmental Economics&Policies,Health Economics&Finance,Economic Theory&Research,Access to Markets,Markets and Market Access

Trade Adjustment and Human Capital Investments: Evidence from Indian Tariff Reform

Do the short and medium term adjustment costs associated with trade liberalization influence schooling and child labor decisions? We examine this question in the context of India's 1991 tariff reforms. Overall, in the 1990s, rural India experienced a dramatic increase in schooling and decline in child labor. However, communities that relied heavily on employment in protected industries before liberalization do not experience as large an increase in schooling or decline in child labor. The data suggest that this failure to follow the national trend of increasing schooling and diminishing work is associated with a failure to follow the national trend in poverty reduction. Schooling costs appear to play a large role in this relationship between poverty, schooling, and child labor. Extrapolating from our results, our estimates imply that roughly half of India's rise in schooling and a third of the fall in child labor during the 1990s can be explained by falling poverty and therefore improved capacity to afford schooling.

International Trade and Child Labor: Cross-Country Evidence

We explore the relationship between greater exposure to trade (as measured by openness) and child labor in a cross country setting. Our methodology accounts for the fact that trade flows are endogenous to child labor (and labor standards more generally) by examining the relationship between child labor and variation in trade based on geography. We find that countries that trade more have less child labor. At the cross-country means, the data suggest an openness elasticity of child labor of -0.7. For low-income countries, the elasticity of child labor with respect to trade with high income countries is -0.9. However, these relationships appear to be largely attributable to the positive association between trade and income. When we control for the endogeneity of trade and for cross-country income differences, the openness elasticity of child labor at cross-country means is much smaller (-0.1) and statistically insignificant. We consistently find a negative but statistically insignificant association between openness and child labor conditional on cross-country income differences when we split the sample into different country groups, consider only trade between high and low income countries, or focus on exports of unskilled-labor intensive products from low income countries. Thus, the cross-country data do not substantiate assertions that trade per se plays a significant role in perpetuating the high levels of child labor that pervade low-income countries.

Should we boycott child labour ?

In high income countries, there is nearly universal popular support for boycotts against products using child labor or punitive sanctions against countries with high levels of child labor. This essay assumes that the reason for this popular support is a concern for the well- being of these child laborers. Consumer boycotts or sanctions should then be viewed by advocates as successful if they make children in low-income countries better off. This essay argues that much of the popular debate on boycotts and sanctions suffers from a failure to consider what children will do if they are not working. To answer this question, the responsible activist or policymaker must understand why children work. While some circumstances of child laborers are so insidious that policies even more aggressive than boycotts may be justified, most of the work performed by children in low income countries reflects the desperateness of their family's poverty. For these cases, if consumer boycotts diminish the earnings power of children, then the incidence of the boycott can be on the poorest of the poor. In this sense, a consumer boycott of products made with child labor can be equivalent to a consumer boycott of poverty relief for both child laborers and their families

Poverty alleviation and child labor

Does child labor decrease as household income rises? This question has important implications for the design of policy on child labor. This paper focuses on a program of unconditional cash transfers in Ecuador. It argues that the effect of a small increase in household income on child labor should be concentrated among children most vulnerable to transitioning from schooling to work. The paper finds support for this hypothesis. Cash transfers have small effects on child time allocation at peak school attendance ages and among children already out of school at baseline, but have large impacts at ages and in groups most likely to leave school and start work. Additional income is associated with a decline in paid work that takes place away from the child's home. Declines in work for pay are associated with increases in school enrollment, especially for girls. Increases in schooling are matched by an increase in education expenditures that appears to absorb most of the cash transfer. However, total household expenditures do not increase with the transfer and appear to fall in households most impacted by the transfer because of the decline in child labor.Street Children,Youth and Governance,Gender and Law,Labor Policies,Primary Education

The Analytical Returns to Measuring a Detailed Household Roster

Households are dynamic while most surveys only collect information on individuals who are present at a single point in time. We exploit a unique and thorough household membership enumeration in Burkina Faso to consider the analytical costs of the typical static household roster. We document that households are extremely fluid with 10 percent of individuals spending sometime away over a three year period, averaging 16 of the 36 months away. The residency status of persons age 16 to 24 is most in flux. A more complete enumeration offers substantial analytical richness that is especially important for the analysis of issues that are intertwined with who is present in the household, such as the measurement of income inequality and the nature of sibling interactions in education decisions. We find that evidence of sibling rivalry in Burkina Faso appears to owe to the correlation between the presence of sisters in a household and nonagricultural income. We argue for more detailed and thorough measurement of household composition in future multi-purpose household surveys.sibling rivalry, Lorenz curves, household composition, schooling