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CHILD LABOR

and its

Socio-Economic
Impact

Devaangi Sharma
Niharika Bhatia

ABSTRACT
“The Child is father of the Man” said Wordsworth. Children begin by
loving their parents; as they grow older they judge them; sometimes
they forgive them. Mahatma Gandhi says, “If we are to teach real
peace in this world, and if we are to carry on a real war against war,
we shall have to begin with the children." With increasing child labor
in India, the future of children is moving towards the darker side.

Simultaneously, there have been obvious consequences on the
society. The purpose of this paper is to provide a structured picture of
what is known and what should be known on the socio-economic
consequences of child labor. Also, our aim is to provide the bigger
picture in which child labor not only increases, but the various
challenges that have come up due to this problem. Various facts and
figures from reliable sources have been presented in certain sections.

A ‘child’ as a social being can however not be defined merely through an age criterion. a child is defined using age criterion. have no access to education. The children are separated from their families. work in hazardous conditions for health and safety. Childhood has its relevance in terms of persons’ social acceptance as adults. is called “Child Labor”.INTRODUCTION “The Child is Father of the Man” said Wordsworth. Government of India is also committed to ensuring protection. According to International Labor Organization(ILO. The International Labor Organization (ILO) defines child labor as "work situations where children are forced to work on a regular basis to earn a living for themselves and their families. and. The worst forms of child labor are those situations where children work more than nine hours in a day.2002 ) “ all children under 15 years of age who are economically active excluding those who are under 5 years and those between12-14 years old who spend less than 14 hours in a week open their jobs unless their activities or occupation are hazardous by nature or circumstances. Generally. generally by providing a space for participation in social affairs with an autonomous identity. Children are the future of the nation. work outside of their family's home. and as a result they remain backward educationally and socially in a situation which is exploitative and harmful to their health and to their physical and mental development. often deprived of educational and training opportunities and they are forced to lead prematurely adult lives (ILO)”. they are vulnerable due to their age and physical power and they cannot make plan for their future and cannot understand the result of any work. Jawaharlal Nehru considered children as one of the greatest asset for the nation. So they should be protected from exploitation and should be given opportunities for their physical and mental development. rights and development of children in our country to overcoming this target government has enacted various legislations such as which prohibit children from working in . earn less than a minimum wage or no wages at all.

.the particularly hazardous and dangerous activities Child Labor prohibition and regulation act 1986.

Due to limited resources and more mouths to feed. Parents for the reason of poverty have to send their children in order to supplement their income derived from child labor. They will also not create union problem.  Government apathy.Most of the Asian and African countries are overpopulated. Thus they are forced to work for their own living.Illiterate parents do not realize the need for a proper physical.  Illiteracy . particularly in the garment industry.Children born out of wedlock. emotional and cognitive development of a child.  Over population .Many a time poverty forces parents to send their children to hazardous jobs. children with no parents and relatives.CAUSES OF CHILD LABOR Child labor is a socio-economic problem. As they are uneducated.  Socio-economic backwardness  Poverty . Children are employed in various forms of work. they have no other alternative as they need the money.Elders often find it difficult to get jobs. they do not realize the importance of education for their children. The major reason that creates the circumstances for a child to work as a child labor includes the following. The industrialists and factory owners find it profitable to employ children. however meager are essential to sustain the family. .The Industrial Revolution has its own negative side.  Orphans . Although they know it is wrong. often do not find anyone to support them. This is so because they can pay less and extract more work.  Unemployment of adult labors . Many a time MNC's and export industries in the developing world employ while workers.  Urbanization .

engaged in both hazardous and non-hazardous occupations and processes. including Bihar.6lacs. Madhya Pradesh. The 1991 Census indicated that 5.25crores (Census 2001) to 90.27crores working children in the country. of whom at least 120 million are working full time. Child labor is still a major problem in India. of which the number of working children was 13. 61% are in Asia. Child Labor has decreased from 1. child population (5-14 years) in India was 179. According to the 1981 Census. indicating that 7.5 million.6lacs. . 32% in Africa and 7% are in Latin America.64 million.2% of the child population were workers. Over 19lakhs child laborers in the 5-14 age group are in Uttar Pradesh. account for 1. Rajasthan accounts for over 12. The Hindi belt. Rajasthan and Uttar Pradesh.REAL SITUATION The ILO estimates that the number of working children in the 5 to 14 age group in the developing countries is 250 million.6% of the child population were workers.75lacs (Census 2011) and recently to 49.6lacs workers followed by Bihar with over 11lakhs and Madhya Pradesh with 10. Of these.

In this paper we keep to this categorization and observe the following guidelines. and the effects on labor market. the effects of child labor on growth . which is heterogeneous. wage earners and unpaid family workers. agricultural and non-agricultural work. formal and informal economy occupations. we disentangle the short run and the long run effects of child labor since the consequences on some economic variables may change over time. children attending and not attending school.ECONOMIC IMPACT OF CHILD LABOR The economic effects of child labor can be divided into those which occur at the micro family level. jobs in modern and traditional industries. we would like to make clear that growth. those on macro variables such as long run growth and foreign direct investment. being merely the rise in per-capita income. and we replicate the analysis for the existence of and a decrease in child labor because the economic implications of child labor are not automatically reversed in the case of a successful reduction in child labor. and younger child laborers. Second. full-time and part-time work. This is important because the economic impacts of different forms of child labor can be – and actually are – different not only in size but even in direction. economic and non-economic activities. Therefore. In the present work this implies that some of the discussed economic effects of child labor (such as income and gender inequality) are relevant to social development independent of their effect on growth. but rather as an intermediate goal that may help – but is not sufficient for – reaching social development. First. should not be considered as the final goal of any policy. Finally. including those aiming at reducing child labor. we unravel the various forms of child labor – hazardous and non-hazardous activities. is potentially misleading as regards the study of economic relationships. focusing on the aggregate number of child laborers. Vice versa.

India) contributed between 10% and 20% to total household income. or are insecure so that child labor is used as a mean of minimizing the impact of possible job loss.described below are important just to the extent that growth can lead to social development. All researchers and practitioners agree that poverty is the main determinant of child labor supply. so that the help of children is crucial to increase household productivity and daily income. the survival of the family depends on child labor irrespective of whether it is carried out in hazardous or nonhazardous activities. Several estimates exist of the proportion in which children contribute to family income: for instance Usha and Devi (1997) find a figure (on average 20%) for child laborers from a village in Tamil Nadu (India). It is common for families to engage in sub-contracting where the family is paid at piece rates. This last point deserves clarification: unpaid family workers contribute to the household’s income and survival by helping their parents in both paid and self-employment activities. any effort to reduce child labor (both in formal and informal occupations) must take into account that the income of . in formal or informal economy. If the work of children is needed for meeting the essential needs of the family. and that child labor significantly increases the income and the probability of survival of the family. In these circumstances. or even in paid or unpaid family activity. failed harvest and other shocks on the family’s income stream. This contribution is most of the time critical since children are sent to work when parents’ earnings are insufficient to guarantee the survival of the family. Child Labor impact at the MICRO family level -Short run effects on household income The most obvious economic impact of child labor at the family level in the short run is to increase household income. and Swaminathan (1998) reports that 40% of children in her sample (Gujarat.

missing the opportunity to enhance their productivity and future earnings capacity. In this way poverty and child labor is passed on from generation to generation. and increases the probability of their offspring being sent to work. .Long run effects on household poverty through human capital Although parents may act rationally by sending their children to work in order to increase their probability of survival. they may not perceive the long run negative implications of child labor for their own family. children sent to work do not accumulate (or underaccumulate)human capital. This lowers the wage of their future families. Since child labor competes with school attendance and proficiency. often pushed below the survival level.families involved will be affected negatively. . Hence social security for poor families with children in school become of crucial importance for the effectiveness of child labor reduction programs.

it is often argued that child labor adds to the supply of unskilled labor. child labor provides poor families with the income they need for their survival. therefore. higher fertility. Child labor can slow down long run growth and social development through reduced human capital accumulation. In the short run. From this point of view. in the present section we analyze the effects of child labor on long-run growth. It should be reminded that some of these channels – namely human capital. Moreover. A lower human capital accumulation also has a direct negative effect on the level of social development. to the extent that higher per capita incomes contribute to social development. On the other side. higher income and gender inequality. A review of the theoretical and empirical literature on child labor has lead us to the identification of at least six channels through which child labor might have a negative impact on long run growth: lower human capital accumulation. child labor can have an indirect effect on social development through long run growth. worse health. by raising the income of those at the bottom of the distribution. in this way depressing the wage rate of unskilled adults. . child labor lessens income inequality.Child Labor impact on long run growth and development Having discussed the short and the long run economic impact of child labor at the family level. health and inequality – are important indicators of a country’s level of social development. This. but the direction of this impact might be ambiguous and could vary in the short and in the long run. makes the distribution of income more unequal. So child labor not only indirectly affects long run growth. of course. -Effects through income inequality Child labor certainly has an impact on income inequality. but also directly affects social development. slower investment and technical change. The net effect on income inequality in the short run therefore depends on the size of the unskilled adults wage loss relative to the children wage rate.

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A different story works in the long run. in turn. child labor negatively affects the income of the involved families and of their descendants through mutually reinforcing low education and high fertility. directly reduces a country’s level of social development. income inequality. Income inequality. the scarce supply of educated labor keeps the skilled workers wage rates at high levels. At the same time. As explained above. . or at least perpetuates. Therefore in the long run there is no doubt that child labor worsens.

Yet. .Child Labor and Globalization Child labor emerged as a global issue when many developed countries started fearing that exports from the developing countries. Globalization might give developing countries the opportunity to increase their gross domestic product (GDP) per capita via new trade possibilities and ascending foreign direct investment (FDI) inflows. it might also be supposed that developed countries transfer their labor intensive industries to the labor abundant developing countries in order to benefit from lower labor costs. In that sense. developing countries might enjoy the comparative advantage of their child labor abundance. including child labor. the worry arises from the fact that the exploitation of children in many developing countries can artificially depress the cost of labor. But on the other hand. The image of multinational corporations closing their plants in developed countries to take advantage of low labor standards. could result in transferring jobs to the ‘Third World’. the increase in GDP per capita entails an increase in child labor employment. leading to unfair “competitive advantage” in world markets and to a downward pressure on unskilled workers wages and employment in rich countries. Next to those assumptions. owing their competitiveness to low labor standards. globalization might enforce developing countries which have less stringent labor market laws and regulations compared with the developed countries to transfer and adopt the stricter standards and regulations of developed countries. in developing countries has been often depicted. Put in economic terms.

Child Labor Impact on Adult Unemployment or Wage Rate The idea that child labor might depress adult wages is strictly linked to the idea that child labor creates adult unemployment. creating adult unemployment. For the time being assume that the average wage rate in the economy is constant. showing their share into the labor force on the horizontal axis and their wage rate relative to the economy’s average wage rate on the vertical axis. Here we shall examine in which circumstances we would expect higher adult unemployment to be more likely than lower adult wages. If children enter the labor market and have a lower reservation wage – the argument reasons – either they displace adults from their jobs. and that labor supply and demand have the standard upward sloping and downward sloping shapes respectively. Both outcomes are subject to the condition of children being substitutes for adults (and vice versa). whose validity has been discussed in the previous section. or they lower the adult wage rate. Graph 1 represents a hypothetical labor market for unskilled adults. . Based on the evidence that child labor is essentially unskilled. the relevant subgroups here are children and unskilled adult workers. First of all it should be clarified that the following analysis applies to any two subgroups of workers that can be considered substitutes for one another and who actually compete for the same jobs.

and that this change reduces the labor demand for unskilled adults at any given relative wage. if the labor supply of unskilled adults is perfectly inelastic (graph 2B) the shift in labor demand can produce a fall in . If the supply of unskilled adults is infinitely elastic (graph 2A) the shift in labor demand will cause a fall in the relative employment of unskilled adults leaving their relative wage rate unchanged. the impact of child labor on the unskilled adults labor market actually depends on the slope of the labor supply.Suppose that an exogenous increase in the relative number of children in labor force (or an exogenous decrease in children’s relative wage rate) takes place. Alternatively. In graph 1 this is represented by the labor demand shifting to the left (from D to D’). So far we have assumed an upward sloping labor supply. However.

children who work unpaid in household enterprises or in domestic services have no effect on adult wages or employment level. if adult wages are pinned down to a minimum and there is initial unemployment (as in point C of graph 2B). a reduction in child labor might create adult employment without affecting adult wages (from C to A). Moreover. banning child labor from certain industrial activities might just push children into worse forms .unskilled adults relative wage rate with no change in their relative employment level. On the other hand. Similarly a reduction in relative child labor supply (in case of an efficient ban on child labor or compulsory education law) or an increase in children relative wage rate (in case of a social protection law) by shifting labor demand for unskilled adults upwards. Finally two already mentioned warnings apply: first. In the case where children and adults are complements rather than substitutes the effect is the opposite (more child labor inducing more adult employment and/or higher adult wages). would lead to an increase in the unskilled adults relative wage while leaving their relative employment unchanged in case of flexible wages (from B to A in graph 2b). It might be useful to recall that the previous statements refer only to child laborers competing with unskilled adults in paid activities48.

increasing the wage rate of children might simply push out of business many poor employers causing a dead loss of income and employment. and second. .of child labor.

The first Convention of ILO.LEGISLATIVE PROVISIONS FOR PROTECTION OF CHILD LABOR The Factories Act of (1881) was the first law to define child and to prescribe prohibitory regulations for employment of children below 7 years of age. they provides for . also prohibit employment of children in the shops hotels. The Shops and Commercial Establishments Acts of different States. (1951) prohibit the employment less than age of 12 years. to rise the minimum age of child to 15 years. Those young persons who are employed. The Factories Act. 2012. However. prescribes prohibitory regulations for employment of children below 14 years of age in any factory. India Mines Act. Plantation Labor Act. compelled amendment of the Act in (1922). The Factories Act. (1911) prohibited employment of children in dangerous occupations and working during night hours. While restricting the night work. street shops and commercial places. (1952) prohibits employment of children below 16 years in any underground mines. (1948). The age rose to 13 years in 1935 under the Act. has several features that are child centered. Protection of children from sexual offence Act. The Motor Transport Workers Act (1961) absolutely prohibits employment of children in motor transport. dhabas. these legislations are careful about their health. children below the age of 12 years where prohibited for employment.

the process like Beedi making. The 3rd part of the Act provides for regulations of conditions of work by prescribing minimum working hours. prohibiting overtime work. Indirect support was extended for such an evil practice which should be totally prohibited irrespective of the nature of employment . prohibiting work at night. the parents who satisfy their economic needs lie about the age of their children. It emphasized on maintenance of a register having details of children if employed by any organization. goods and mails and other hazardous work in railways and ports. While prohibiting employment in certain occupation and processes. and weekly holiday. cement manufacturing.medical fitness certificates by the young persons. These include the transport of passengers. mica cutting. wool cleaning and building and construction industries. Also. manufacturing of matches and explosives. Also. The Act prohibited employment of children below the age of 14 years in certain occupations and processes. the Act provides measures for health and safety of child workers. soap manufacturing. The Child Labor (Prohibition and Regulation) Act was enacted in 1986. the law legalized employment of children in other cases.

It is the socially and economically deprived section of the population who are working. The law must be enforced stringently. A multi disciplinary approach involving specialist with medical. The child labor can be stopped when knowledge is translated into legislation and action. Thrust area is Rehabilitation of these children and on improving the economic conditions of their families. the inability to enforce a ban on child labor in a situation of poverty. that is one. poverty is one among other on the seed bed for child labor and enhances problem greatly. CRY. Rescued children need speed educational intervention to prepare them for regular schools. Many NGOs like CARE India. The health conditions that have a deleterious impact on their physical ability and development. It should also be made mandatory for all employers to take steps for intellectual. vocational and educational well-being and upliftment of child workers who were so far engaged by them. and socio- . Global March against child labor. psychological.CONCLUSION Child labor is a national shame and one of the forgotten issues of our country. multiple remedies need to be adopted. Ample of grounds come to the research but it is usually two in our view. Focusing on grass root strategies to mobilize communities against child labor and reintegration of child workers into their homes and schools has proven crucial to breaking the cycle of child labor. The non-government organizations should make a pertinent duty to convince the parents that a promising future awaits for them and for their children if they send their kids to the school instead of work field and no matter in the sea of educated unemployment their children may get through and can expect a bright future instead of perpetuating their poverty and degradation by not doing so. a concern for the poor households that depends on the earnings of the child workers and secondly. etc have been working to eradicate child labor in India. with strong mechanism for inspection and prosecution against the daredevils. Undoubtedly. The endurance of young children is higher and they cannot protest against discrimination. Hence enforcement alone cannot help to solve it. moving good intentions and ideas into protecting the health of the children.

which marks a historic moment for the children of India. . It is in this context that we have to take a relook at the landmark passing of the Right of Children to Free and Compulsory Education (RTE) Act 2009.anthropological level is needed to curb this evil.

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