The Role of Trade and Offshoring in the Determination of Relative Wages and Child Labour

35 Pages Posted: 24 Jul 2017

See all articles by Alessandro Cigno

Alessandro Cigno

Department of Economics and Management, University of Florence; CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics; Centre for Household, Income, Labour and Demographic Economics (CHILD)

Giorgia Giovannetti

Università di Firenze

Laura Sabani

University of Florence

Date Written: July 04, 2017

Abstract

Incorporating family decisions in a two-period.model of the world economy, we predict that trade liberalization raises the skill premium and reduces child labour in developing countries where the adult labour force is sufficiently well educated to attract production activities from abroad that will increase the demand for skilled relative to unskilled labour. Elsewhere, liberalization will reduce the skill premium, but it will not necessarily raise child labour. Our prediction is not rejected by the data, and it explains why child labour is negatively associated with trade openness in those developing countries where the labour force was relatively well educated when the liberalization took place, but not in the others.

Keywords: child labour, education, trade liberalization, skill endowments, skill premium

JEL Classification: D130, D330, F160, J130, J240

Suggested Citation

Cigno, Alessandro and Giovannetti, Giorgia and Sabani, Laura, The Role of Trade and Offshoring in the Determination of Relative Wages and Child Labour (July 04, 2017). CESifo Working Paper Series No. 6549, Available at SSRN: https://ssrn.com/abstract=3005903 or http://dx.doi.org/10.2139/ssrn.3005903

Alessandro Cigno (Contact Author)

Department of Economics and Management, University of Florence ( email )

Via delle Pandette 21
D5-309
Firenze, 50127
Italy
+39 055-4374491 (Phone)
+39 055-4374919 (Fax)

HOME PAGE: http://www.alessandrocigno.it/

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Centre for Household, Income, Labour and Demographic Economics (CHILD) ( email )

Turin, TO
Italy

Giorgia Giovannetti

Università di Firenze ( email )

Piazza di San Marco, 4
Florence, 50121
Italy

Laura Sabani

University of Florence ( email )

Piazza di San Marco, 4
Florence, 50121
Italy

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
37
Abstract Views
451
PlumX Metrics