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Unpublished Paper
Child Labor and International Trade
  • Woody R Clermont
Advocates of laissez-faire claim that without market restrictions, the equilibrium reached will be economically and thus Pareto efficient under the first fundamental welfare theorem; by contrast, these same advocates contend that an equilibrium allocation under a child-labor ban results in a worsening to welfare. Typically coupled with a ban will be a child education law, which will increase government spending, yet not be welfare improving relative to the laissez-faire equilibrium and which will distort the market. In this sense, mandatory education results in higher human capital and lower wage inequality. This has the odd effect of increasing the wages of unskilled adult workers (who have less competition from children), and decreasing the wages of skilled workers (who will receive increased competition from children who graduate educated). I have selected two journal articles to review the literature on the subject of child labor in international trade. What follows in turn, is a summary report of each. Four other articles were considered but not used for the two summary reports. I include reference to them at the end.
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Woody R Clermont. "Child Labor and International Trade" (2012)
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