Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/25097
Authors: 
Braun, Sebastian
Year of Publication: 
2006
Series/Report no.: 
SFB 649 discussion paper 2006,014
Abstract: 
We test the often-cited hypothesis that high levels of child labour attract foreign investors. Using panel data we show the overall effect, which child labour has on foreign direct investment (FDI), to be a (small) negative one. We find strong evidence for the theoretical prediction that child labour deters FDI by slowing down economic development. Weaker evidence is provided for our theoretical prediction that child labour can discourage FDI via its impact on the availability of a skilled labour force in an economy. The data do not indicate that high levels of child labour drive down the factor share of labour, thereby increasing the attractiveness of an economy for foreign investors.
Subjects: 
child labour
FDI
core labour standards
JEL: 
C33
F23
J82
Document Type: 
Working Paper

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