Working Paper: CEPR ID: DP5953
Authors: Matthias Doepke; Dirk Krüger
Abstract: In this paper we investigate the positive and normative consequences of child-labour restrictions for economic aggregates and welfare. We argue that even though the laissez-faire equilibrium may be inefficient, there are usually better policies to cure these inefficiencies than the imposition of a child-labour ban. Given this finding, we investigate the potential political-economic reasons behind the emergence and persistence of child-labour legislation. Our investigation is based on a structural dynamic general equilibrium model that provides a coherent and uniform framework for our analysis.
Keywords: child labour; inequality; political economy; welfare
JEL Codes: J40; J82; O11; O40
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Child labour laws (J88) | lower welfare (I38) |
| Market imperfections (D43) | government intervention (O25) |
| Political support for child labour restrictions (J88) | enactment of child labour laws (J88) |
| Child labour laws (J88) | restrictions on household choices (D10) |
| Skilled adults' interests (J24) | child labour laws (J88) |