Sam Bostaph asked:
So, what's wrong with "child labor"? And, what's the age cutoff, below
which it can't be defended?
There are lots of arguments against child labor. Many of these are
non-economic (moral, psychological, biological, etc). Here I confine myself
to sketching out two strictly economic arguments. One is based on a
consideration of the child as an individual with a full life ahead. The
other views the child as a member of a family focused on the present.
The individual model first. The argument supposes that working competes
with schooling so that children who labor receive a sub-optimal amount of
education. More precisely put the suggestion is that the higher lifetime
earnings of the well-educated adult (compared to the ill-educated one who
labored as a child) more than reward the forgone income of receiving the
additional schooling. With this perspective society has an interest in
prohibiting child labor with the objective to increase the future
productivity of some of its citizens, to reduce the need for welfare
payments and/or unemployment benefits to the ill-educated downstream, and to
reap any external benefits to a more highly educated population (more
inventions, for example). To complete this argument those who call for a
prohibition on child labor must assume that the decision maker (the child or
his/her parents making the work/school decision in the child=92s best
interest) either does not perceive the advantages of education (lack of
information), has unreasonably high discount rates (lack of foresight),
lacks self control, or is unable to borrow against future income. In lieu
of the wages the child would earn, borrowing may be required to finance
consumption of the child=92s household. If capital markets were efficient,
the child could pledge the higher future income as collateral (a student
loan).
There would be alternatives to the prohibition of child labor if lack of
information were the key problem (subsidize the transfer of the relevant
information) or if capital market failure was a problem (improve capital
market efficiency, perhaps with a government guarantee of student loans).
If the problem is thought to be incurable lack of foresight or lack of self
control, the labor market in theory might provide a solution by offering
compulsive life-time job tenure without the possibility of quitting or early
retirement. Under such an arrangement the employer would see that the child
gets the optimal education when young. The problem with that type of
=93market solution=94 is that involuntary servitude has been outlawed by the
13^th Amendment to the Constitution. As an aside, I might mention, that
slavery was sometimes defended by the (racist) assertion that Blacks lacked
sufficient foresight and self-control to make their own decisions.
If one accepts this class of argument against child labor, the answer to the
second question what is the dividing line between (inefficient) child labor
and (efficient) adult labor is conceptually easy to answer. It is the
point where the individual has accumulated the optimal amount of education.
Presumably this would vary from individual to individual based on their
aptitude for education and their productivity as child laborers (child
actors for example might be following an optimal education/career path).
The age threshold would also vary with the structure of the economy. It is
often suggested that more education is =93required=94 to be productive in
today=92= s complex and highly specialized economy then was true in simpler
times. If so the threshold age should be higher today than in the past.
The second line of economic argument views the child as an asset to the
family and views the family as primarily concerned with its own day-to-day
welfare. Putting children to work increases the total family=92s pecuniary
income but (leaving the money aside) reduces the welfare of the child who
would prefer "leisure" or schooling to work. Presumably others in the
family value the child=92s utility and will need to weigh that loss against
the income the child could be expected to earn. The second argument assumes
that in many cases, however, the parent or other adult who makes the
decisions for the family will undervalue the child=92s disutility of work
and =93exploit=94 the child= in order to increase consumption. This line of
thought assumes insufficient altruism or empathy on the part of the parent
and a lack of voice on the part of the child. Society has an interest in
preventing this =93selfish=94 exploitation of its children by their parents,
or so the argument goes.
The answer to the second question, if one accepts the exploitation argument,
is that the threshold for labor should be the same as the age of
independence and majority.
The two arguments are not mutually exclusive, but are rarely joined when
arguing against child labor.
The two approaches have some different empirical implications. For the
family balancing family income against the child=92s disutility there should
be an income and wage effect. The lower the family income and the higher
the child wage the less salient will be the disutility of work. Child labor
should be more likely in poor families than prosperous ones (a correlation
not predicted by the individual model). High child wages would increase
child labor in the second model, but only affect the age threshold for child
labor in the first case. If the work available for children was itself
educational and skill building (as might be the case for farm labor on a
family farm or work in a family-owned restaurant), child labor would be more
likely in the first case, but those factors would be unimportant in the
second case. If the family has several children we might anticipate that
one child might be favored while the others are put to work if we take the
second view, but no such multiple sibling effect should be present if the
first model is correct. The higher the return to education the less child
labor there would be with the first model and if high discount rates or
imperfect capital markets were at fault, but those returns would not
influence the decision in a family that gives no voice to the child.
Richard Sutch
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