Relative Affluence and Child Labor—Explaining a Paradox

13 Pages Posted: 13 Nov 2017

See all articles by Jayanta Kumar Dwibedi

Jayanta Kumar Dwibedi

Brahmmananda Keshab Chandra (B.K.C.) College - Department of Economics

Sugata Marjit

Centre for Studies in Social Sciences, Calcutta; Indian Institute of Foreign Trade; City University of Hong Kong (CityU) - Department of Economics & Finance

Date Written: November 2017

Abstract

Some micro level empirical studies found child labor incidence increasing even with improvement in the economic conditions of the poor. This paper provides a possible explanation as to why increase in absolute income may not be sufficient to solve the problem of child labor. We argue that people in general are not just concerned about their own consumption; they are very much affected by the consumption of their peers. While taking decisions regarding the time allocation of their children between work and leisure, parents do keep an eye on their relative position in the society. We develop a theoretical model of household decision making to show that child labor supply from a poor family can increase even with improvements in its economic conditions, if the family's relative position in the society deteriorates and if the relative status effect is sufficiently strong.

Suggested Citation

Dwibedi, Jayanta Kumar and Marjit, Sugata and Marjit, Sugata, Relative Affluence and Child Labor—Explaining a Paradox (November 2017). Review of Development Economics, Vol. 21, Issue 4, pp. 1178-1190, 2017, Available at SSRN: https://ssrn.com/abstract=3069189 or http://dx.doi.org/10.1111/rode.12304

Jayanta Kumar Dwibedi (Contact Author)

Brahmmananda Keshab Chandra (B.K.C.) College - Department of Economics ( email )

Kolkata 700 035 West Bengal
India
91-33-564-4950 (Phone)

Sugata Marjit

Indian Institute of Foreign Trade ( email )

New Delhi
QUTUB INSTITUTIONAL AREA
NEW DELHI, 110016
India

Centre for Studies in Social Sciences, Calcutta ( email )

R 1, B.P. Township
Kolkata, West Bengal, India
Kolkata, West Bengal 700094
India

City University of Hong Kong (CityU) - Department of Economics & Finance ( email )

83 Tat Chee Avenue
Kowloon
Hong Kong

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