There are many differing opinions about the effects of globalization and liberalized trading policies on incidences of child labor. Some argue that globalization increases child labor and to combat this potential problem, the sale of products produced under loose child labor laws should be limited through sanctions. Eric Edmonds, Dartmouth College, presented his collaborative research with Nina Pavnik, Dartmouth College and National Bureau of Research (NBER) on an alternative theory that liberalized trade and access to world markets may diminish child labor by raising the standard of living in poor countries.
Mr. Edmonds notes that most research on child labor has focused on the manufacturing sector while very little research has been conducted on the impact of trade and well being in very poor, largely agrarian countries such as Vietnam. In addition, he states that there is a great deal of ambiguity about the relationship between child labor and trade in theoretical models. With these issues in mind, the researchers employed data from two rounds of the Vietnam Living Standards Survey (VLSS), during the country’s reduction of rice export quotas to examine, empirically, potential links between liberalized trade policy and child labor. Their aim was to examining regional and intertemporal variation in the real price of rice and to explore the relationship between these fluctuations and the use of child labor.
During the quota reduction period, 1993 through 1997, the price of rice increased thirty percent. The author’s research indicates that the price changes are related to the decline in economic activities of children, which, on average, decreased nine percent. According to Mr. Edmonds, rice price changes accounted for 47 percent on the decrease in Vietnamese child labor between 1993 and 1998. The results also indicate that households that own land show a greater decrease in child labor and that the rice price increase affected girls aged 14 to 15 the most as they benefited from a measurable shift from household production to schooling.
Mr. Edmonds concludes by explaining that their findings have implications for other issues related to child labor as their research suggests that all export oriented sectors and market liberalization policies do not necessarily promote child labor. Therefore, policy makers may wish to rethink sanctions as a means to curtail child labor.
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