Mortality risks,education and child labor

In this paper, we investigate the role of young adult mortality on child labor and educational decisions. We argue that mortality risks are a major source of risks in returns to education in developing countries. We show that, in the absence of appropriate insurance mechanisms, the level of child labor is inefficient, but it can be too high or too low. It is too high when parents are not very altruistic and anticipate positive transfers from their children in the future. Uncertain returns to education, endogenous mortality or imperfect capital markets unambiguously increase child labor. When the level of child labor is inefficiently high, we also show that a cash transfer conditional on child's schooling can always restore efficiency regarding child labor.     

Gender Inequality and Trade*

The paper empirically explores the international linkages between gender inequality and trade flows of a sample of 92 developed and developing countries. The focus is on comparative advantage in labor‐intensive manufactured goods. The results indicate that gender wage inequality is positively associated with comparative advantage in labor‐intensive goods, i.e. countries with a larger gender wage gap have higher exports of these goods. Also, gender inequality in labor force activity rates and educational attainment rates are negatively linked with comparative advantage in labor‐intensive commodities.     

Eldercare hours,work hours and perceived filial obligations

ABSTRACT

In this paper, we take a fresh look at the magnitude of the trade-off between caring informally for a parent and paid work. We adopt a simultaneous approach with a primary focus on how hours of care are influenced by hours of work rather than the other way round. We also investigate the role that filial obligations play in choices of caring versus working. Using the SHARE data (2004 and 2006) we find that the elasticity of informal care hours in response to working hours is between ?0.17 in the caregivers sample and ?0.19 in the women-only caregivers sample; small but not negligible. Moreover, we find that a 10%increase in the index measuring the strength of filial obligations increases weekly hours of care by about two and a half hours.     

Exploring the spatial determinants of children’s activities: evidence from India

This article investigates the choice of children’s activities in India and provides recommendations for areas where policy intervention to promote schooling and combat child labor would be most successful. First, we recognize that child schooling and labor are not the sole activities that children can engage in and include idleness as one of the choices. Second, we use a hierarchical model with spatially correlated random effects to analyze the determinants of the choice of children’s activities. Lastly, we recommend that pro-schooling intervention be implemented in districts with favorable attitudes toward schooling and unfavorable attitudes toward idleness, while anti-child-labor interventions be implemented in districts where attitudes toward child labor are less favorable. We thus identify two groups of Indian districts to target appropriate government interventions.     

Trade Sanctions and the Incidence of Child Labor

The purpose of this paper is to develop an imperfect competition model of a small open developing country to analyze the effects of trade sanctions on the incidence of child labor. We show that a uniform tariff levied by the developed countries on imports produced with the help of child labor is a failure in terms of reducing child labor. A more effective course of action would be a firm‐specific tariff where the tariff rate varies with the amount of child labor incorporated in a single good. While such an instrument reduces child labor, however, it worsens the children’s well‐being due to lower income and consumption. Contrary to expectations, the entrepreneurs in the developing countries, supposedly the main beneficiaries of child labor, are better off under trade sanctions as they realize higher profits.     

Labor Training and Foreign Direct Investment

Evidence shows that most foreign direct investment (FDI) flows from developed to developed countries (North–North) in skilled labor‐intensive industries. This paper builds a model that incorporates labor training into the proximity–concentration tradeoffs to analyze the entry mode of multinationals to a foreign country. Production requires both skilled labor and unskilled labor.. A multinational pursuing FDI needs to provide training to some workers in the host country to equip them with skills that are specific to the production of the firm. Labor training and skill specificity lead to contract friction. It is shown that in skilled labor‐intensive industries, FDI increases along with the economic development level of the host country, whereas in unskilled labor‐intensive industries, the reverse is true. This paper provides a theoretical explanation for the empirical findings on the prevalence of North–North FDI in skilled labor‐industries and North–South FDI in unskilled labor‐intensive industries.     

Informal Caregiving and the Retirement Decision

The probability of providing informal care grows with one's own age. While labor market effects due to caregiving are moderate, they could be concentrated in the years close to retirement. Therefore, I investigate whether care in the previous year leads to retirement in the year after by using German Socio‐Economic Panel data from 2001 to 2009 and discrete‐time hazard models. The effect of care on the retirement decision is indeed much higher than its effect on the labor or working hours of middle‐aged individuals. Women are affected to a larger extent but the retirement decision of men also reacts to their caregiving obligations.     

Child labor and schooling responses to anticipated income in South Africa

Forward looking, unconstrained households make child labor and schooling decisions considering their permanent income and weighing the relative returns to child time in various potential activities. The timing of anticipated changes in income should have no effect on child labor and schooling in a setting where households can borrow against permanent income. However, this study documents large increases in schooling attendance and declines in total hours worked when black South African families become eligible for fully anticipatable social pension income. As an explanation, the data are most consistent with liquidity constraints for black elder males forcing rural families into less schooling for boys than they would choose absent the constraint, perhaps because of schooling costs.     

Intergenerational transfers,demographic transition,and altruism: Problems in developing Asia

This paper develops a three‐period overlapping‐generations model where middle‐aged agents care about not only their own lifetime utility but also their old parents' and children's well‐being. The doubly altruistic agents choose amounts of intergenerational transfers to their old parents and children as well as private savings. The government specifies amounts of public transfers from working adults to the dependents. The model also takes the effects of demographic transition on the burdens of supporting the elderly and children into account. Using 23 countries' data from the National Transfer Accounts (NTA ), we estimate the degrees of filial and parental altruism and adjust them for their respective life expectancy and fertility rates. The findings suggest that people in developing countries are more parentally altruistic than those in developed ones while the adjusted degree of filial altruism tends to be low in developing Asia. Our welfare analyses reveal that the developing Asian countries must introduce more comprehensive public welfare programs for the elderly to maximize social welfare. Moreover, their low adjusted degree of filial altruism may trap the developing Asian countries at the low levels of public old‐age support and social welfare as the further demographic transition ensues.     

No country for young men: International migration and left‐behind children in Tajikistan

This paper investigates the effects of international migration on the schooling and labour outcomes of left‐behind children in rural Tajikistan. Using three‐wave panel survey data, I rely on an instrumental variable strategy to address the non‐random selection into migration. I identify important and gender‐differenced schooling and labour supply responses. My findings suggest that boys living in migrant households are less likely to lag behind at school or work. At the intensive margin, they also report fewer hours of work per week. On the other hand, left‐behind teenage females undertake a higher number of domestic chores. They appear to marry earlier as well. The migration impact on boys appears to be driven by remittances and the improved financial situation of households. The absence of any positive influence on the education of left‐behind girls is likely to be explained by Tajikistan's cultural norms and institutions.     

Conditional cash transfers tools to combat child labor: Evidence from a randomized controlled trial in Costa Rica

The Government of Costa Rica collaborated with a research team to conduct a randomized controlled trial of their Working Children and Adolescents program. The program provided working youth with a monthly cash transfer with the conditions that they attend school regularly and complete their grade. This study examines the effect of the cash transfer on (1) child labor and hazardous child labor participation as well as hours worked; (2) school enrollment, attendance, and completion; and (3) self-reported health. The main findings provide evidence of a statistically significant reduction of more than 4 hours worked per week by children. The findings also suggest null effects on labor participation and school outcomes. Cost-effectiveness analysis shows that the program demonstrates a transfer effectiveness and cost-effectiveness comparable to similar interventions in Latin American countries. The subsidy alone does not seem enough to improve schooling outcomes, justifying the necessity of additional education policies to complement the cash transfer program.     

Investment credit and child labour

It is generally assumed that credit has a positive effect on children's schooling among poor households. This article shows that need not be the case when households obtain credit for investment purposes. In fact, investment loans may not have any effect on the likelihood of schooling for children who work in their family business. Our estimates confirm that this is the case; credit used to finance investments has no effect on the odds of schooling for employed children. This may be because investment loans increase children's labour productivity, which in turn increases the opportunity cost of schooling. The results of this study suggest that improving access to credit may not, by itself, constitute a solution to the problem of child labour in developing countries.     

Intra‐industry Trade Liberalization: Why Skilled Workers are More Likely to Support Free Trade

This paper presents a theoretical model and empirical analysis that connects the prevalence of intra‐industry trade with increased wage inequality from trade liberalization in both skilled and unskilled labor abundant countries. The Stolper–Samuelson effect is incorporated into an intra‐industry trade liberalization (intra‐ITL) hypothesis where skilled labor opposes protectionism in all countries engaged in intra‐industry trade because skilled workers gain at the expense of unskilled workers from multilateral trade liberalization within the skill‐intensive sector. We examine empirical evidence on whether skilled individuals are more supportive of trade liberalization than unskilled individuals across 31 countries with different levels of intra‐industry trade and skill endowments. We find that the extent to which countries engage in intra‐industry trade in high‐tech commodities is strongly linked with the intensity of opposition to protection by skilled labor. Regression results strongly support our hypothesis that skilled workers, almost everywhere, are more likely to support free trade.     

Guaranteed Manufactured without Child Labor: The Economics of Consumer Boycotts, Social Labeling and Trade Sanctions

Does labeling products “Child‐Labor Free” provide a market‐based solution to the pervasive employment of child labor? This paper explores the promise of social labeling in the context of its four oft‐noted objectives: child labor employment, consumer information, welfare, and trade linkages, when competition between the North and South is based both on comparative cost advantage, and the use of child labor as a hidden product attribute. We show that (i) social labeling benefits consumers and Southern producers, whereas children and Northern producers are worse off; (ii) trade sanctions on unlabeled products deteriorates Southern terms of trade, but leaves the incidence of child labor strictly unaffected; and (iii) a threat to sanction imports of unlabeled Southern products discourages the South from maintaining a credible social labeling program. We also explore the question of whether social labeling should be viewed as a transitory or a permanent institution in developing economies.     

Extensive and Intensive Margins of Exports and Labor Heterogeneity

This paper investigates how changes in skilled and unskilled labor supply affect different margins of exports. Using bilateral trade data in manufacturing sectors of 34 countries from 1995 to 2010, we find that most of the impact of skilled labor on exports goes through the intensive margin, whereas most of the effect of unskilled labor works through the extensive margin. These outcomes result from the impact of labor skill composition on the productivity cut‐off of exporters. We also find that the impact of skilled and unskilled labor on trade margins depends on the income level of countries and on the type of products. The results indicate that the effect of skilled labor is greater for low‐income countries and differentiated products, while that of unskilled labor is greater for high‐income countries and homogeneous products.     

Supply and quality choices in private child care markets: Evidence from São Paulo

Many developing countries have adopted the market approach for expanding the supply of child care, but little is known about the economic behavior of independent providers. Drawing on uniquely rich census data on child care providers from São Paulo, we document three main facts: (1) the stock of private suppliers is considerably larger in high-income city districts; (2) the quality of private provision – as measured by teachers' schooling, group size and equipment – is highly heterogeneous across space and increases systematically with local household income; and (3) a considerable share of centers operates below recommended (but not regulated) quality standards, especially in low-income districts. These findings are consistent with a model of endogenous entry and quality choices by heterogeneous providers. Market-driven heterogeneity in the quality of provision across space is an important consideration for the design of regulations in child care markets.     

Child Gender,Intergenerational Kinship and Parental Labor Market Outcomes

This paper provides new evidence of the effects of child gender on parental labor market outcomes. Using data from the China Health and Nutrition Survey, I document a son premium on the intensive margin of parental labor supply in two‐parent families with one child. Parents with a newborn to a 6‐year‐old son have higher labor supply than parents with a daughter in the same age group. A further examination indicates that boys are likely to have better access to grandparent‐provided childcare than girls owing to grandson preference, and this allows parents with a preschool‐aged son to work more. The intensification of market work associated with having a son may affect economic outcomes over the lifecycle of parents through labor market attachment. This paper thus sheds light on the important distributional effects of family ties and culture on economic outcomes.     

Explaining variation in child labor statistics

Child labor statistics are critical for assessing the extent and nature of child labor activities in developing countries. In practice, widespread variation exists in how child labor is measured. Questionnaire modules vary across countries and within countries over time along several dimensions, including respondent type and the structure of the questionnaire. Little is known about the effect of these differences on child labor statistics. This paper presents the results from a randomized survey experiment in Tanzania focusing on two survey design choices: different questionnaire design to classify children work and proxy response versus self-reporting. Use of a short module compared with a more detailed questionnaire has a statistically significant effect, especially on child labor force participation rates, and, to a lesser extent, on working hours. Proxy reports do not differ significantly from a child's self-report. Further analysis demonstrates that survey design choices affect the coefficient estimates of some determinants of child labor in a child labor supply equation. The results suggest that low-cost changes to questionnaire design will potentially clarify the concept of work for respondents.     

Trade Union Rights,Democracy, and Exports: a Gravity Model Approach*

The paper uses a gravity trade model to evaluate the effects of trade union rights and democracy on exports for the 1993 to 1999 period for four classifications of manufacturing industries by labor‐intensity. The model includes data for 162 countries and used eight indicators of trade union rights and democracy, including those constructed by the authors. The paper finds robust relationships between stronger trade union rights and higher total manufacturing exports and between stronger democracy and higher total exports, total manufacturing exports, and labor‐intensive manufacturing exports. The paper finds that the relationship between trade union rights and labor‐intensive manufacturing exports is highly sensitive to the classification of labor‐intensive manufacturing industries and to model specification, yielding statistically significant results of opposite sign depending on assumptions.     

Dual Poverty Trap: Intra‐ and Intergenerational Linkages in Frictional Labor Markets

This paper constructs an overlapping generations model with a frictional labor market to explain persistent low education in developing countries. When parents are uneducated, their children often face difficulties in finishing school and therefore are likely to remain uneducated. Moreover, if children expect that other children of the same generation will not receive an education, they expect that firms will not create enough jobs for educated workers, and thus are further discouraged from schooling. These intergenerational and intragenerational mechanisms reinforce each other, creating a serious poverty trap. Escape from the trap requires the well‐organized and combined implementation of a subsidy for schooling, support for disadvantaged children, and public awareness programs.