Child Labor and Trade Liberalization in Indonesia

52 Pages Posted: 15 Sep 2009

See all articles by Krisztina Kis-Katos

Krisztina Kis-Katos

University of Freiburg - College of Economics and Behavioral Sciences

Robert A. Sparrow

Wageningen UR - Development Economics Group; Erasmus University Rotterdam (EUR) - Institute of Social Studies (ISS); IZA Institute of Labor Economics

Abstract

We examine the effects of trade liberalization on child work in Indonesia. Our estimation strategy identifies geographical differences in the effects of trade policy through district level exposure to reduction in import tariff barriers. We use a balanced panel of 261 districts, based on four rounds (1993 to 2002) of the Indonesian annual national household survey (Susenas), and relate workforce participation of children aged 10-15 to geographic variation in relative tariff exposure. Our main findings show that increased exposure to trade liberalization is associated with a decrease in child work among the 10 to 15 year olds. The effects of tariff reductions are strongest for children from low skill backgrounds and in rural areas. Favorable income effects for the poor, induced by trade liberalization, are likely to be the dominating effects underlying these results.

Keywords: poverty, trade liberalization, child labor, Indonesia

JEL Classification: J13, O24, O15

Suggested Citation

Kis-Katos, Krisztina and Sparrow, Robert A., Child Labor and Trade Liberalization in Indonesia. IZA Discussion Paper No. 4376. Available at SSRN: https://ssrn.com/abstract=1472568

Krisztina Kis-Katos

University of Freiburg - College of Economics and Behavioral Sciences ( email )

Freiburg, D-79085
Germany
+44 - (0)761 203 2344 (Phone)
+44 - (0)761 203 2414 (Fax)

HOME PAGE: http://www.vwl.uni-freiburg.de/fakultaet/sopo/team/kis-katos.htm

Robert A. Sparrow (Contact Author)

Wageningen UR - Development Economics Group ( email )

Hollandseweg 1
WAGENINGEN, 6706 KN
Netherlands

Erasmus University Rotterdam (EUR) - Institute of Social Studies (ISS) ( email )

PO Box 29776
Den Haag, 2518 AX
Netherlands

IZA Institute of Labor Economics

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

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