Perverse Consequences of Well-Intentioned Regulation: Evidence from India's Child Labor Ban
Prashant Bharadwaj (University of California, San Diego)
Monday, 10/21/2013, 12 pm. ARCHIVED EVENT
Location: G150 A&B ISR - Perry
This presentation will not be streamed or archived.
While bans against child labor are a common policy tool, there is very little empirical evidence validating their effectiveness. Most of the existing literature evaluating the impact of child labor bans has been theoretical. In this paper we examine empirically the consequences of India's landmark legislation against child labor, the Child Labor (Prohibition and Regulation) Act of 1986. Using data from employment surveys conducted before and after the ban, and using age restrictions that determined whom the ban applied to, we show that child wages decrease and child labor increases after the ban. The increase appears to come mainly from families where the head is less educated, suggesting poverty as a key determinant of why families use child labor. These results are consistent with a theoretical model building on the seminal work of Basu and Van (1998) and Basu (2005), where families use child labor to reach subsistence constraints and where child wages decrease in response to bans, leading poor families to utilize more child labor.