Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/259310 
Year of Publication: 
2001
Series/Report no.: 
Working Paper No. 2001-14
Publisher: 
Bar-Ilan University, Department of Economics, Ramat-Gan
Abstract: 
This paper investigates the phenomenon of child labor. I consider a society that in principle values education. Parents derive utility from social conformity, and “good” and “bad” equilibria can arise where the majority of children respectively do and do not go to school. In a “bad” equilibrium, social conformity sustains child labor, and I consider policies to change the equilibrium. Taxes on income from child labor may not be a feasible enforcement task for the tax administration. Incentive payments financed by domestic taxation can be provided to parents who send children to school, and can, but need not, discourage child labor. Also, again the domestic tax base may not be available. The effective and assured means of changing social norms to end child labor is externally financed incentive payments. Such payments can require extensive foreign assistance. However, when social norms underlie the phenomenon of child labor, the external assistance need only be temporary since the change in social norms is a case of hysteresis. After a period of time the incentive payments to parents can be removed, and an equilibrium where children go to school rather than work is sustained.
Subjects: 
Child labor
social conformity
social norms
education and economic development
JEL: 
J24
K31
O15
D60
Document Type: 
Working Paper

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