Earlier this month, Kailash Satyarthi and Malala Yousafzai were announced the joint winners of the Nobel Peace Prize, in recognition of their efforts to protect the rights of children. Yousafzai’s courageous campaign for female education in Pakistan has garnered more global attention of late, but Satyarthi’s work to end child labor is just as important. His South Asian Coalition on Child Servitude has raided factories across India and liberated more than 40,000 bonded laborers, many of them children working and living under armed guard. Satyarthi has campaigned for strengthened laws banning the practice and has begun a global campaign against child labor involving more than 2,000 civil society organizations around the planet. His Nobel will put a spotlight on the issue of child labor worldwide.
It isn’t easy to end child labor in poor countries. In fact, passing laws banning anyone under 14 or 16 from working can actually make the problem worse. If we are going to sustainably reduce the level of child labor worldwide, we need to provide parents the resources so they can make the choice to keep children out of the factory or field and send them to school instead.
The International Labor Office estimates (pdf) there are about 168 million child laborers, accounting for about one in 10 of the world’s children. That is a one-third reduction since 2000, which is heartening progress. Thankfully, only about 4 percent of child laborers are in forced or bonded labor, prostitution, or fighting in armed conflict. The great majority of the rest are working in the field or home next to their parents.
That’s not to suggest most child labor isn’t a problem. Children who work on the family farm or in the family business labor an average of nearly 27 hours (pdf) a week—many will work far more. Such a heavy time commitment means child laborers are far less likely to be in school. Even those who do combine schoolwork and paying work see lower test scores—many are too exhausted to study. And they can be exposed to dangerous chemicals and pesticides, especially on the farm. The injury rate from child labor in agriculture, at 12 percent, is actually higher than the 9 percent rate in industry.
So why do so many parents make the active decision to keep their child laboring? The vast majority of fathers and mothers don’t want their kids to work, but the poorest parents often feel that they have little choice if they are to keep their family clothed and fed. Across countries, as many as a third of children are working in the poorest economies, such as Tanzania and Ethiopia. That compares with zero to 5 percent (pdf) in countries with a GDP per capita above $10,000.
The complex economics of family finances show why simply passing laws against child labor can backfire. The impact of India’s 1986 landmark legislation against child labor in factories is one example. Economists Prashant Bharadwaj and Leah Lakdawala studied child labor rates and payments before and after the ban was implemented across different industries. They found the result of the law was to drive wages for children down and the number of hours they worked up. The effect was largest among poor families. They needed the child income: If kids could earn less in a given time, they would just have to earn longer. One further result was that fewer kids enrolled in school, because they were too busy working.
One proven way to improve the school-work tradeoff faced by parents—foregoing money today to make an investment in their children’s future—is to support families who send their children to school. A number of countries have introduced cash transfer schemes that pay families with kids in school. Mexico’s Opportunidades program gives mothers as much for keeping the girl in the ninth grade as two-thirds the amount a girl would earn in the labor force. The program has reduced child labor rates by as much as a quarter. And because sending kids to work is a choice of desperation for most parents, even unconditional cash transfers—simply giving poor people money with no strings attached—has reduced child labor rates in Malawi and South Africa. Providing free school meals is another approach (pdf) to increase enrollment and improve learning.
India’s child labor law is one painful example of well-meaning regulation backfiring. It is hardly the only one: Other labor protection laws have sometimes reduced the number of jobs available (pdf) to those meant to be protected; and rent control regulations can increase the rents (pdf) paid by the average renter. In many of these cases, the better approach may be to focus on rewarding good behavior through transfers or subsidies rather than punishing bad or painful choices. That takes money to implement, but as the example of child labor amply demonstrates, the alternative isn’t cost-free, either.