International Trade and Child Labor: Cross-Country Evidence

40 Pages Posted: 13 Apr 2004

See all articles by Eric V. Edmonds

Eric V. Edmonds

Dartmouth College - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Nina Pavcnik

Dartmouth College - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: March 2004

Abstract

We explore the relationship between greater exposure to trade (as measured by openness) and child labour in a cross-country setting. Our methodology accounts for the fact that trade flows are endogenous to child labour (and labour standards more generally) by examining the relationship between child labour and variation in trade based on geography. We find that countries that trade more have less child labour. At the cross-country means, the data suggest an openness elasticity of child labour of -0.7. For low-income countries, the elasticity of child labour with respect to trade with high-income countries is -0.9. These relationships appear to be largely attributable to the positive association between trade and income. When we control for the endogeneity of trade and for cross-country income differences, the openness elasticity of child labour at cross-country means is much smaller (-0.1) and statistically insignificant. We consistently find a negative but statistically insignificant association between openness and child labour conditional on cross-country income differences when we split the sample into different country groups, consider only trade between high and low income countries, or focus on exports of unskilled-labour intensive products from low income countries. Thus, the cross-country data do not substantiate assertions that trade per se plays a significant role in perpetuating the high levels of child labour that pervade low-income countries.

Keywords: International trade, child labour, cross-country study, endogeneity

JEL Classification: F14, F15

Suggested Citation

Edmonds, Eric V. and Pavcnik, Nina, International Trade and Child Labor: Cross-Country Evidence (March 2004). CEPR Discussion Paper No. 4309. Available at SSRN: https://ssrn.com/abstract=528302

Eric V. Edmonds

Dartmouth College - Department of Economics ( email )

6106 Rockefeller Hall
Hanover, NH 03755
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

IZA Institute of Labor Economics

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

Nina Pavcnik (Contact Author)

Dartmouth College - Department of Economics ( email )

6106 Rockefeller Hall
Hanover, NH 03755
United States
603-646-2537 (Phone)
603-646-2122 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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