Research Changes Ideas About Children and Work

The New York Times, "Economic Scene" , July 14, 2005

When Americans think about child labor in poor countries, they rarely picture girls fetching water or boys tending livestock. Yet most of the 211 million children, ages 5 to 14, who work worldwide are not in factories. They are working in agriculture -- from 92 percent in Vietnam to 63 percent in Guatemala -- and most are not paid directly.

"Contrary to popular perception in high-income countries, most working children are employed by their parents rather than in manufacturing establishments or other forms of wage employment," two Dartmouth economists, Eric V. Edmonds and Nina Pavcnik, wrote in "Child Labor in the Global Economy," published in the Winter 2005 Journal of Economic Perspectives.

Their article surveys what is known about child labor. Research over the past several years, by these economists and others, has begun to erode some popular beliefs about why children work, what they do and when they are likely to leave work for school.

When he started working on child labor issues six years ago, Professor Edmonds said in an interview, "the conventional view was that child labor really wasn't about poverty." Children's work, many policy makers believed, "reflected perhaps parental callousness or a lack of education for parents about the benefits of educating your child." So policies to curb child labor focused on educating parents about why their children should not work and banning children's employment to remove the temptation.

Recent research, however, casts doubt on the cultural explanation. "In every context that I've looked at things, child labor seems to be almost entirely about poverty. I wouldn't say it's only about poverty, but it's got a lot to do with poverty," Professor Edmonds said.

As families' incomes increase, children tend to stop working and, where schools are available, they go to school. If family incomes drop, children are more likely to return to work.

Some of the best data, and the most noteworthy results, come from Vietnam, which tracked about 3,000 households from 1993 to 1998. This was a period of rapid economic growth, in which gross domestic product rose about 9 percent a year.

In a paper published in the Winter 2005 Journal of Human Resources, "Does Child Labor Decline With Improving Economic Status?," Professor Edmonds found that child labor dropped by nearly 30 percent over this five-year period. Rising incomes explain about 60 percent of that shift.

The effects were greatest for families escaping poverty. For those who crossed the official poverty line, earning enough to pay for adequate food and basic necessities, higher incomes accounted for 80 percent of the drop in child labor. In 1993, 58 percent of the population fell below the poverty line, compared with 33 percent five years later.

"Child labor does not appear to vary with per capita expenditure until households can meet their food needs, and it then declines dramatically," Professor Edmonds wrote. (His articles may be downloaded at http://www.dartmouth.edu/~eedmonds/.)

During this same period, Vietnam repealed its policy against exporting rice. That opened a big new market for Vietnamese farmers -- the country went from almost no exports to being one of the world's top rice exporters -- and significantly raised the price of rice.

This change, along with the family survey data, allowed Professors Edmonds and Pavcnik to examine what happens when household incomes rise but children's labor also becomes more valuable. Their paper, "The Effect of Trade Liberalization on Child Labor," was published in the March 2005 Journal of International Economics.

In the interview, Professor Edmonds said he expected that the booming market for rice would lead more children to work in agriculture, if only on their own families' farms, because the value of their labor had risen substantially. But that was not what happened.

"Instead, it looks like what households did was, with rising income, they purchased substitutes for child labor. They used more fertilizers. There was more mechanization, more purchasing of tools," he said, adding, "It was the opposite of what I expected to find coming in."

For the minority of Vietnamese families who buy more rice than they produce, rising prices mean effectively lower incomes. That might lead to children's working to compensate. The economists did not find a statistically significant change for these families, however.

The results from Vietnam suggest that families do not want their children to work. Parents pull their children out of work when they can afford to, even when the wages children could earn are rising. Poverty, not culture, appears to be the fundamental problem.

Rather than simply banning child labor, then, policy makers should concentrate on alleviating poverty. That includes not only encouraging economic growth but also improving access to schools and to credit markets. Borrowing could allow families to buy equipment to substitute for child labor, to weather short-term declines in income and to pay school fees. (Professor Edmonds examines a striking example of the credit problem in "Child Labor and Schooling Responses to Anticipated Income in South Africa," forthcoming in The Journal of Development Economics.)

"Most child labor policy even today is directed at trying to get kids into unemployment -- to limit working opportunities for kids," he said in the interview. But, "if households are already in a situation where they don't want their children to be working, but they're forced to because of their circumstance, taking additional steps to prevent the kids from working is punishing the poorest for being poor."