DP5953 Origins and Consequences of Child Labour Restrictions: A Macroeconomic Perspective

Author(s): Matthias Doepke, Dirk Krueger
Publication Date: November 2006
Keyword(s): child labour, inequality, political economy, welfare
JEL(s): J40, J82, O11, O40
Programme Areas: International Macroeconomics, Public Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=5953

In this paper we investigate the positive and normative consequences of child-labour restrictions for economic aggregates and welfare. We argue that even though the laissez-faire equilibrium may be inefficient, there are usually better policies to cure these inefficiencies than the imposition of a child-labour ban. Given this finding, we investigate the potential political-economic reasons behind the emergence and persistence of child-labour legislation. Our investigation is based on a structural dynamic general equilibrium model that provides a coherent and uniform framework for our analysis.