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Child Labour Increase

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Globalisation, the process by which an increasing share of world production is traded

internationally, and the productive systems of different countries become increasingly

integrated, is credited with many merits and held responsible for many evils. The

present paper attempts to answer the following question: given that international trade

has major allocative and distributive implications, are children likely to be among the

losers? More specifically, given that child labour appears to be on the increase

worldwide, could this be a consequence of globalisation?

The current wave of globalisation started soon after the end of the second

world war, but got in its stride in the 1980s, as rapid progress in information and

transport technology compounded the effects of trade liberalisation (Krugman, 1995).

To try and understand the consequences of globalisation it thus seems reasonable to

look at what has happened over the last couple of decades. Much of the existing

literature on the subject is concerned with the consequences of globalisation for wages

and employment in the developed world (Wood, 1998). Since our concern is child

labour, and child labour is concentrated mainly in the developing world,2 we shall

focus on developing countries.

A useful source of cross-country information on child labour and international

trade are the World Bank's Development Indicators. Another valuable source of

information on trade openness is Sachs and Warner (1995), which classifies a country

as "open" if free from a number of obstacles to trade, from non-tariff barriers to state

monopoly on major exports. Combining these two sources of information, we

assembled a set of relevant data on all developing countries for the relevant years

available, namely 1980, 1990, 1995 and 1998.

The measure of child labour that figures in the Development Indicators is the

participation rate of persons aged 10 to 14. That is an important indicator of early

involvement in work activities, but presents two lacunae. The first is that, by

excluding children younger than 10, it leaves out a large, arguably the most

worrisome, part of the phenomenon in question. A substantial number of children in

that age group is working either part or full time. According to the 1999 National

2 Though not on a comparable scale, child labour is becoming a problem also in developed countries.

There, however, it is largely connected with clandestine immigration. One way or another, the main

source of child workers is thus the developing world.


Council of Applied Economic Research survey of rural Indian households, for

example, around 10 percent of children aged 6 to 10 were reported by their parents as

working in one way or another.3 The second lacuna is that this measure of child

labour does not include children working within the household, and does not account

for children engaged in unofficial, especially if illegal, work activities. We know from

other sources, however, that children are extensively engaged in domestic activities,

and that many children reportedly doing nothing could be actually working. For

example, in the already mentioned Indian survey, the place where children are most

commonly reported to be working is the household. In the same survey, as much as a

quarter of children between the ages of 6 and 14 is reported as neither working nor

attending school, but there are reasons to suspect that a sizeable proportion of them

works (Cigno and Rosati, 2002).

As an alternative to this measure of child labour, we shall use also the primary

school non-attendance rate (the complement to unity of the primary school net

enrolment rate reported in the Development Indicators). The shortcoming of this

alternative measure is that a child not attending school is not necessarily working. On

the other hand, however, children not reporting for school are more difficult to

monitor, and thus more at risk of exposure to the worst forms of abuse - from

hazardous or very hard work, to soldiering and prostitution - than children regularly

available for inspection by the school authorities (Cigno, Rosati and Tzannatos,

2002). Therefore, the non-attendance rate is not only a correlate of child labour at

very young ages, but also a valuable danger signal. The 10-14 labour participation

rate and the primary school non-attendance rate are positively correlated with each

other across countries and years of observation, but the coefficient of correlation is

much less than unity.

3 Detailed information for about 40 countries can be found at


Figure 1.Correlation between Child Labour and Trade

Figures 1 and 2 show that both measures of child labour are negatively



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