Trade Liberalization, Child Labor and Schooling: Evidence from India
Edmonds, Eric; Pavcnik, Nina; Topalova, Petia
Few issues are more controversial in the contemporary globalization debate than the effects of trade liberalization on poverty and well-being in low-income countries. The question of how changes in trade policy affect child labor and schooling is particularly contentious. We study the relationship between changes in trade policy and schooling and child labor using detailed household level data from the Indian National Sample Survey (NSS) spanning the period of trade liberalization initiated in 1991. We explore the causal link between liberalization and changes in child labor by relating child labor to district and inter-temporal variation in exposure to tariff cuts. During the time period of our study, India experienced dramatic declines in child labor and increases in schooling attendance. However, we find that children living in districts more exposed to tariff cuts observed smaller declines in child labor and smaller increases in school attendance. We believe the findings reflect some of the adjustment costs associated with trade liberalization, and they illustrate how even temporary adjustment costs may have long-term effects on the impacted.
Mario Einaudi Center for International Studies
Liberalization; Poverty; Welfare; Child Labor; India; Tarriffs; Economics; Education