Child labor and trade liberalization

There are two simple prerequisites to get of child labor: high returns to education and sufficient parental income. The difficulty is to satisfy these conditions. Would the trade liberalization that comes with globalization help?

Krisztina Kis-Katos and Robert Sparrow study child labor outcomes in Indonesia as a consequence of heterogeneous decreases in tariffs. As the latter have different impacts on difference districts, and they measure child labor in those districts, they can identify the impact of trade liberalization on child labor. It turns out the advantages of globalization play through and help reduce child labor. The dynamics are tricky, though, as there may be a short term burst in child labor after a tariff decrease. One can imagine that a sudden increase in labor demand tempts children to work, but as parent income increases and future income prospects improve, children go back to school for good.

This is one more reason people should stop blaming child labor on globalization. While the latter is a new phenomenon, child labor was always present. And if you want poor countries to benefit from world wealth, the barriers should be reduced.