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