A new GLO Discussion Paper explains the conditions when the ban is not self-enforcing.
GLO Discussion Paper No. 1325, 2023
Can a ban on child labour be self-enforcing? – Download PDF
by Cigno, Alessandro
GLO Fellow Alessandro Cigno
Author Abstract: Basu and Van (1998) show that a ban on child labour may be self-enforcing if, above the subsistence level, no amount of consumption can compensate parents for the disutility of child labour. We show that a partial ban may be self-enforcing, but a total one never is, if education is available, and the disutility of child labour can be compensated by the expected utility of future consumption. If some of the work children do is not observable by the government, a ban may be only apparently self-enforcing, or actually counterproductive. If the government wants to reduce child labour and raise education to the efficient level, it can borrow from the international credit market to subsidize parents, and tax their children’s future wages to pay the loan back with interests.
Journal of Population Economics (JOPE)
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