Child labour and economic growth

Abstract

This paper examines the relationship between national income and child labour. We are particularly interested in evaluating the economic role of children at different stages of development. Our objective is to show that in the aggregate, at a low level of development the direction of the relationship between the incidence of child labour and per capita income is indefinite. Child labour may increase or decrease with income.

Forecasts of the child labour force participation rate as well as per capita gross domestic product are made for each country in the sample. We also forecast future levels of the primary net enrollment ratio in an effort to provide empirical support for our policy recommendations.

Using panel data methodology, we find evidence of an inverted-U, Kuznets-like relationship between the child labour force participation rate and per capita GDP. Holding all else constant, forecast results suggest that for those countries on upward sloping part of the curve, child labour is a problem that will persist for many years to come. The growth rates of per capita GDP required to reach 10 per cent child labour by the target date, 2029, range from 2 per cent to 15 per cent.

Our results highlight the importance of the identification of other aspects of development as determinants of child labour levels, as well as exploring the role of government policy. Further research opportunities are also presented.