Working Paper: NBER ID: w8760
Authors: Eric Edmonds; Nina Pavcnik
Abstract: 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.
Keywords: No keywords provided
JEL Codes: F15; F14
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| increases in rice prices (Q11) | reductions in child labor (J88) |
| increases in rice prices (Q11) | increased school attendance among girls (I24) |
| increases in rice prices (Q11) | enhancement of household income (D19) |
| enhancement of household income (D19) | reductions in child labor (J88) |
| increases in rice prices (Q11) | substitution of adult income for child labor (J82) |
| increases in rice prices (Q11) | declines in child labor participation among older girls (J21) |
| increases in rice prices (Q11) | account for decline in child labor in Vietnam during the 1990s (J88) |