Basu, Kaushik: The Intriguing Relation Between Adult Minimum Wage and Child Labor
World Conference Econometric Society, 2000, Seattle

Kaushik Basu, Cornell University
The Intriguing Relation Between Adult Minimum Wage and Child Labor
Session: C-11-19  Tuesday 15 August 2000  by Basu, Kaushik
Because most parents send their children to work when compelled by poverty, one would expect a rise in adult wage to lower child labor. However, if the rise in wage is achieved by a minimum wage law, its impact can be intriguing. It can, for instance, cause some adults to be unemployed and send their children to work, which in turn displaces more adult labour and sends more children to work. The paper solves this process and predicts the incidence of child labor. It shows that, for appropriate parametric configurations, child labour may fall or rise as the adult minimum wage is raised.


File created by Jurgen Doornik with eswc2000.ox on 2-01-2001