Why Children Labour

This is the 39th installment of my weekly column for Mint, Thinking it Through.

If blouses were people, there is one variety of blouse that would feel rather ashamed of its origins right now. Last week, the clothing company Gap pulled a smock blouse for children from its stores because it was found to have been made by young children in India. The press called it names such as the ‘child labour top’, and the hapless thing is now being exterminated. A Gap spokesman announced that child labour was “completely unacceptable”, and that they would prevent a recurrence.

The resulting international outrage gave children’s rights groups the boost they needed to push forward a series of raids over the last few days. Child workers were rescued from seedy bylanes in Delhi, where they were hard at work in small, cramped rooms. The Observer  wrote that according to the UN, “Child labour contributes an estimated 20% of India’s gross national product with 55 million children aged from five to 14 employed across the business and domestic sectors.”

Working children are all around us: at the office canteen, the Udupi restaurant, the neighbourhood grocer’s, the traffic signal. It is so ubiquitous that most of us don’t even notice it when we shout, “Chhotu, ek chai la.” Nobody in his right mind can condone it—there are few thefts as appalling as that of someone’s childhood.

For the sake of these children, I have a request to make to the activists and journalists behind all these recent exposés: six months from now, in May 2008, do a follow-up on all these kids who have been ‘rescued’ and tell us how they’re doing. Are they going to school? Are they having a normal, happy childhood? Indeed, tell us in just one word: are they better off?

My guess is that most of the kids will be employed in similar jobs—or worse. There are studies to back my fears. Oxfam once reported on a situation in Bangladesh where international outrage forced factories to lay off 30,000 child workers. Many of those kids starved to death; many became prostitutes. A 1995 Unicef study described how an international boycott of carpets made in Nepal using child labour led to between 5,000 and 7,000 Nepali girls turning to prostitution because a better option was now denied to them.

It is common sense that if these kids could have a better life, their parents would make sure they got it. Parents in poor countries are no different from parents in rich ones. They want their children to be free from the cares of the world, to go to school, to not have to worry about their next meal. Like all other parents, they must be tormented by the thought of their child having to sweat it out for a living. Why do they make their child work then? Because poverty leaves them with no other choice.

In a 1997 paper titled The Economics of Child Labor, Kaushik Basu and Pham Hoang Van showed that “child labour as a mass phenomenon occurs not because of parental selfishness but because of the parents’ concern for the household’s survival”. Basu and Van set out the Luxury Axiom: “A family will send the children to the labour market only if the family’s income from non-child-labour sources drops very low.” This is why, they stated, “the children of the non-poor seldom work even in very poor countries… In other words, children’s leisure or, more precisely, non-work is a luxury good in the household’s consumption in the sense that a poor household cannot afford to consume this good, but it does so as soon as the household income rises sufficiently.”

There have been a slew of studies in recent years that support Basu and Van’s findings, such as a 2004 paper by Eric Edmonds, Does Child Labor Decline with Improving Economic Status? (Yes.) A 1997 study by Alan Krueger even put a figure to it, stating that child labour ceases to be seen in an economy when it reaches an average income of $5,000. A 2005 study by Edmonds and Nina Pavcnik described child labour as a symptom of poverty, and not a cause.

Shutting down a sweatshop here or there may make us feel compassionate, but it amounts, almost literally, to throwing out the baby with the bathwater. The families concerned remain so poor that the kids need to find work. The Indian state has proved incapable of providing education or feeding them, and by legislating against child labour, merely drives it underground and provides a revenue stream for hafta-grabbing officials.

In a small percentage of cases involving child labour, coercion is used. That is unambiguously wrong, and should obviously be prosecuted. But most working kids in India are bonded not by physical force, but by economic circumstance. The solution to this is something that I keep harping on in this column—the government must stop restraining the only force that can lift millions of parents out of poverty: private enterprise and free markets. There is no other long-term way to fix this terrible problem.

*  *  *

My thanks to the fellers in the Satin egroup for their inputs, particularly Neha for pointing me towards a couple of useful studies. Some of the studies I wanted to go through aren’t available for free online, so thanks to Yazad and Gaurav for using their institutional contacts to get them for me. Here is some interesting reading on the subject, in case you’re interested:

Child Labor (pdf file)—Eric Edmonds
Trade and Child Labour—Eric Edmonds and Nina Pavcnik
Child Labor or Child Prostitution?—Thomas DeGregori
The Factory System of the Early Nineteenth Century—William H Hutt
Kathie Lee’s Children—William Anderson
Child Labour (Global Ethics Consortium)— Don Berkich
Good for the Goose, Bad for the Gander—Peter T Leeson and Joshua Hall

Research Changes Ideas About Children and Work—Virginia Postrel

*  *  *

You can browse through all my columns for Mint in my Thinking it Through archives.