Slide 1:20/01/2009 1 ..\061012-child-labor[1].jpg Introduction Child Labour Focused Areas Who are child labourers and how many? What is the dilemma? What is the solution? Conclusion IEG 7th March, 2008 , Praveen kuamr 1


Slide 2:20/01/2009 2 Child Labour ILO : distinguishes child labour from economically active Children by asserting that a child above the age of 12 Who does light ,part time work, that is not hazardous may be economically active but is not to be counted as a child labourer India:Law Child Labour (Prohibition and Regulation) Act 1986, seeks to prohibit employment of children below 14 years in hazardous occupations and processes and regulates the working conditions in other employments. Recently, Government has also decided to include children working as domestic servants and those working in dhabas/roadside eateries /motels etc. in the category of hazardous occupations. 2


Slide 3:20/01/2009 3 Child labour Child labour in figures (global estimates 2002) = knowledge National surveys (50) ( 1998-2002) Rapid assessments& Baseline studies (100) (2000-2003) 246 million child labourers Worldwide ( age 5-17) 146 million children Aged 6-11 Out of school 283 million children Aged 12-17 out of school Majority boys Majority girls 3


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Slide 5:20/01/2009 5 5 The global experiences……….. Britain : Roberts Peel's factories act 1802 Incidence of child labour remained very high U.S experience: child labor control act 1837 Faster decline in child labour between 1880-1910. What do other studies say………….? Moehling 1999: law had very little effect on the incidence of child labour in Britain Should the govt intervene ……………? There is need for formal empirical analysis of the effect of the law on child labour , the broad evidence suggests that the effect may not be what people take it to be at face value . Indeed it can be shown that when it comes to the use of a fine for employing children the effect can be the opposite of what we may expect .


Slide 6:20/01/2009 6 Should the firms employing child be fined? A house hold sends its children to work in order to escape poverty and starvation , now There is a new law whereby firms are fined whenever they are caught using child clearly this will cause the wage for child labour to drop this is because children are now less input for firms. But this in turn will mean children will have to work even harder to be able to earn the target income (subsistence- level) Empirically , consider a lobour market in which each household consists one adult and several children in a labour market , adults and children are perfect substitutes. The adult always supplies labour perfectly inelastically , where as children work only to the extent of subsistence. 6 IPEC


Slide 7:20/01/2009 7 7 Children will work only when adult wage rate is below s. let w be the adult wage in the economy . if w>s no child labour evolves. What happens when govt comes into picture.? Govt imposes a fine =D rupees . Let p be the probability for a firm to be caught so every time the firm will be fined = pD( punishment cost). Let Wc be the child wage rate firm will employ a child only when Wc

Slide 8:20/01/2009 8 8 Consider the case when govt tries to raise the fine . This will mean that employing children will be more expensive for the firms , because with each child there is risk of being caught and having to pay the larger fine to the govt. so as the penalty rises the market will make sure that child wage will drop. And once the child wage drops each household will be forced to send more children to work to meet the subsistence consumption target, so herein lies the essence of Pathology ,an increased fine for employing children could raise the child labour


Slide 9:20/01/2009 9 Concluding remarks: Which agency to control ? National government International bodies Or Ordinary consumers But again Inadequate access Northern protectionism. Direct or indirect approach . Close analysis required .