The Intriguing Relation between Adult Minimum Wage and Child Labour

Posted: 13 Nov 2000

See all articles by Kaushik Basu

Kaushik Basu

Cornell University - Department of Economics; IZA Institute of Labor Economics; Brookings Institution

Abstract

Because most parents send their children to work when compelled by poverty, one would expect a rise in adult wage to lower child labour. However, if the rise in wage is achieved by a minimum wage law, its impact can be intriguing. It can, for instance, cause some adults to be unemployed and send their children to work, which in turn displaces more adult labour and sends more children to work. The paper solves this process and predicts the incidence of child labour. It shows that, for appropriate parametric configurations, child labour may fall or rise as the adult minimum wage is raised.

JEL Classification: J13, J38

Suggested Citation

Basu, Kaushik, The Intriguing Relation between Adult Minimum Wage and Child Labour. The Economic Journal, Vol. 110, Issue 462, March 2000 . Available at SSRN: https://ssrn.com/abstract=233403

Kaushik Basu (Contact Author)

Cornell University - Department of Economics ( email )

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IZA Institute of Labor Economics

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Brookings Institution ( email )

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