Impacts of Child Labour in Developing Countries

What are the causes and consequences of child labour amongst developing countries

The child labour as a social and economic phenomenon has many aspects the most important of which seems to be the low level of financial growth that characterizes several countries which are commonly known as ‘developing.’ This paper illustrates the conditions that created the necessity of the child labour, and at the same time it presents the consequences of this situation as they can be observed through a series of specific facts and other types of empirical evidence that have been collected by the relevant sources of scientific research.

The analysis of the problem, as described above, is followed by the presentation of a number of policies, which could help thelimitation of the problem to the most feasible level. The research done on this specific problem has revealed the existence of a high volume of relevant theories as well as of statistical data that have also been used to support the current paper.

Ι. Introduction

The problem of the child labour has become a very important subjectof examination and research by the most of the internationalinstitutions especially the last decade. The reason for that is not the absence of this problem in the past but the development of the technology and the communication around the world that gave the opportunity for a series of long-lasting social problems to becomeknown to the international community. The extension and theimportance of the specific problem are severe obstacles towards its elimination.

On the other hand, the creation of an international legal framework  asit has been expressed by the establishment of authorized bodies and the signing of a series of orders and Conventions, can considered as an important step towards the achievement of a solution.  

We have to notice though that the best possible policy to thatdirection would have to compromise with the existence and the size ofthe problem avoiding to set targets that could not be achieved. Under the current circumstances, the child labour cannot disappear from the scene; it can just be reduced to a certain level (as this one is formulated by the social and financial conditions of each country).

The main aim of this paper is to provide a detailed examination of the problem backed with a series of relevant data and other empirical evidence. The analysis of the current situation, as described in Chapter II, begins with the presentation of the background of the problem followed by statistical data and the views stated in the literature regarding the definition and the observation of child labour amongst developing countries.

The policies that can be applied for the limitation of the problem are being presented in Chapter III. The investigation of the facts and the needs that created the phenomenon of the child labour cannot be achieved without the use of the literature (Chapter IV) that has been dealt with the specific matter mainly during the last years.

The evidence that has been used to identify and interpret the problem,is presented in Chapter V. Finally, Chapter VI contains brief remarks on the problem as they have been extracted from the research done.

II. The child labour in the international community – background, definition and areas of children exploitation

The period in which child labour appeared as a social reality cannot be defined with accuracy. There are opinions that relate the beginning of the problem with the industrial revolution whereas other ones state that the child labour had first appeared in the nineteenth century. From an investigation that took place in Britain in June 1832, it seems that the phenomenon of child labour was known at that period and referred to children working as laborers mainly to factories butalso to other business activities. The above investigation (as it is analytically presented in Basu, K., 1999, 1088) was supervised by a British Parliamentary Committee and had as main subject the child labour in the United Kingdom at that period. Although Britain was in a rather high rank regarding the child labour – which can be explained by the fact that England was under development at that period of time –other countries that also had a remarkable industrial development likethe Belgium, the USA and the Japan, presented a similar image regardingthe work of children in the multiple sectors of industry (see also K.Basu, 1999, 1088-89).

Moreover, the data collected for the measurement of the relevantpractices during the 19th century showed that child labour did notstart declining in Britain and in United States until the second halfof that century (L.F. Lopez-Calva, 2001, 64).

The dimensions of the problem of child labour can create an important concern about the level of the life that a lot of children face but also about the financial situation of a large majority of families around the world. According to data collected by the International Labor Organization (ILO), there are approximately 250 million working children aged between 5 and 14, of which at least 120 million are involved in full-time work that is both hazardous and exploitative (seealso T. I. Palley, 2002).

Although the so-called ‘developed’ countries have shown samples of tolerance regarding the child labour, the areas that seem to cultivate the problem are those with low level of economic  and industrial growth. In a relevant research made by D.K. Brown (2001) it seems that the major factor for the existence of the problem is the poverty. The capital market failure  of a specific country (as it is expressed tothe every day aspects of life, like the low level of schooling) isconsidered as another important element that co-operates the appearance and the extension of the phenomenon.

When speaking for child labour we usually refer to any work by childrenthat interferes with their physical and mental development , i.e. anywork that keeps the child away from ‘childhood related activities’(Chandrasekhar, 1997). The above definition although containing ageneral view of the child labour, it cannot be applied under allcircumstances bearing in mind that a lot of differences may appear inthe context of ‘childhood related activities’ in dependance with the country and the cultural influences. In this case, a more specific description of child labour is considered as necessary. M. Majumdar(2001) divides the child labour into the following categories: a) the household work, b) non-domestic and non-monetary work, c) wage labour and d) commercial sexual exploitation and bonded labour.

The child labour can be applied in many areas. As an indicative examplewe can refer to the report of the National Consumers Leage (NCL) which divides the possible areas of child labour into the followingcategories (refering to specific daily activities and regarding thedanger that they include): agriculture (is the most dangerous industryfor the young workers), working alone and late-night work in retail(most deaths of young workers in this industry are robbery-relatedhomicides), construction and work at heights (deaths and serious injuryresult from working at heights 6 feet and above.

The most common typesof fatal falls are falls from roofs, ladders and scaffolds or staging),driver/operator of forklifts and tractors (tractor-related accidentsare the most prevalent cause of agricultural fatalities in the U.S.A.),traveling youth crews (defined as youth who are recruited to sellcandy, magazine subscribtions and other items door-to-door or on streetcorners, these youth operate under dangerous conditions and areunsupervised) (Occupational Hazards, Aug2004)

III. Policies towards the limitation of the problem

A fundamental measure for the limitation of the child labour is thecreation of legislation  that would impose a minimum work age and yearsof compulsory education. Although this solution seems rather in it’sdesigning, in practice it’s quite difficult to operate . The needs ofthe everyday life can often surpass the power of the legal rules, which have been structured usually after the examination and the analysis of specific events and cannot confront the problem to its whole area.

One of the main problems that a family usually faces is the change inthe working situation of its (adult) members and the financial pressurethat usually follows. Of course, there is always the solution of funding (especially when the general financial market of a country offers such an option) . However, there are occasions that such an alternative cannot operate either because the country do not afford such a plan or the specific family do not have access to this plan.

Under these circumstances, it could still be possible for the householdto tap internal assets. The presence of the father in a household, thepresence of an older person in the household or the capacity of the mother to enter into the market in order to work or proceed to another type of work (in a personal enterprise), all the above can be variables that can support the assets of a family even if the latter is suffered from strong financial difficulties (see also D. K. Brown, 2001, 766).

Despite the theoretical character of the legislation, there could beother measures , more applicable  and feasible to be realized. Aneffort that has such a character is the increased spending on books,supplies, buildings and teacher training – as it has been pursued by several governments  (D. K. Brown, 772).

In cases that the child labour cannot be avoided, there could be somemeasures  to both to protect the children and help them to continuetheir school  (while keep on working). The design of specific schedules that would allow the children to attend school after their work could be proved very helpful towards this direction. Of course, such a plan contains a lot of requirements that need to be met .

As an example we could mention the sufficiency of resources (teachers) that could workfor the extra time needed and – at the same time – the existence of afinancial strategy (and of the relevant money) for the payment of these resources. On the other hand, a problem that may arise is the lack ofequipment or capital for the premises of the school to be open forextra hours. And we cannot forget the danger that may be related withthe attendance late at night (especially in the case of the paper – thedeveloping countries).

The phenomenon of the child labor has been examined and analyzed to the highest possible point by the use of the observation and theresearch in accordance with the existing legislation and the general rules that have been introduced from several countries aiming to the limitation of the problem.

One of the most important studies regarding the child labour is this ofK. Basu and P. H. Van (1998) who tried to find and analyze the causesof this specific problem. After studying the results of the empiricalevidence they came to the conclusion that child labour was notconnected exclusively with external factors (i.e. employers) but it was mostly the result of internal (in the family) decisions and facts.Towards that direction, K. Basu  and P. H. Van examined first the view that child labour has been based on the ‘greed of employers who employthe children and the parents who send the children to work’.

The above statement is first examined by the fact that in families, which can afford the non-work of children (i.e. when the income of the parents isconsidered as sufficient), the parents try to avoid sending theirchildren to work. This phenomenon appears even in very poor countries.Under the previous aspect, the child labour is connected with thefinancial situation of the family (usually income of parents) and not the interests of the employers. This assumption of the leading family’srole is also backed, according to K. Basu and P. H. Van, by the analysis of late nineteenth-century cencus data for Philadelphia whichwas made by Claudia Goldin in 1979.

According to this analysis, when the income of the father is high the probability that the child will enter the labour market is low and this relation operates in a very tight interaction (the higher the wage of the father, the lower thechance of such a fact to get realized). Another empirical evidence that seems to back the views of K. Basu and P. H. Van comes from a research that was made on this issue (connection between the family’s decision and the child labour) by D. Vincent who studied working-class autobiographies.

The results of his study showed that the children when working avoid to blame their parents but they tend to believe that it was the poverty that imposed their participation in the labour market.K. Basu and P. H. Van examined the issue of the role of the family’s decision to the child labour under the assumption that the decision ismade by a parent.

They also admit that the results of their study may differ in case that this decision is made by another person (as stated by the theories which ask for the rejection of the ‘unitary model’ of the household).

Regarding the role of the family’s decision to the child labour, J. G.Scoville presented a model of the above decision based on the use of mathematical symbols in order to represent the real facts. In his model, there are factors (such as the social or economic class, race,ethnicity, caste or color) that define the family utility function andin this way they can cause important implications to labour market segmentation (J. G. Scoville, 715)

Regarding the existence and the extension of the child labour, M.Murshed states that two are the basic issues that need to be examined in order to achieve a comprehensive analysis of the problem. The first issue includes the mechanisms under which the family decides to send a child at work. The second one is the reason for which the employers demand child laborers.

In order to explain the first issue, M. Murshed uses the theory ofBecker’s, known as ‘A theory of the Allocation of Time’, which presents a model for studying the household decision-making process. In the above model Becker’s suggests that the decision of the family is based to the needs of the household.

Whenever an extra income is consideredas necessary, family decides to send the child at work. In this model both wages of children and adults contribute to family resources.

As for the second issue, M. Murshed (179) argues that employer tend to demand child laborers because ‘they are less aware of their rights,less troublesome, more willing to take orders and to do monotonous work without complaining. Another factor is also that children work forlower wages and are not in a labour union because they work illegally’.
M. Hazan and B. Berdugo (2002, 811) examined the dynamic evolution of child labour, fertility and human capital in the process of development.

Their analysis is based on the following assumptions: a)parents  ‘control their children’s time and allocate it between labourand human capital formation’, b) parents care about the futureearning’s of their children, c) the income that is generated by children is given to parents’ and that d) child ‘rearing is time intensive’. According to their findings, in early stages of development, the economy is in a development trap while child labour is abundant, fertility is high and output per capita is low.  On the other hand, the increase in the wage differential (between parental and childlabour) ‘decreases fertility and child labour and increases children’seducation. As a final result, child labour tends to decrease as the‘household’s dependency on child labour’s income diminishes’.

The ‘welfare economics’ approach tries to examine the child labour from the scope of investment and time allocation within the household. According to this theory, the time of the child (the non-leisure one)can be used either for school attendance and/or for work. The family makes a decision for the allocation of the child’s time (i.e. for one of the above mention activities) after the calculation of the difference between the marginal benefit of the child labour (i.e.earnings and saved costs of schooling) and the marginal cost (in terms of foregone return to human capital investment). If the first of the above elements is estimated as having a higher price than the second one, then the family decides the participation of the child to the labour market (see also M. Majumdar, 2001).

The decision of the parents regarding the entrance of their children tothe labour market can – under certain circumstances – be unefficient.According to Ballard and Robinson (2000) the above decisions areefficient when the credit market is perfect and the intergenerational altruistic transfers are nonzero. On the other hand, when there are liquidity constraints or the altruistic transfers are at a corner,these decisions are considered as inefficient. A. Bommier and P. Dubois(2004) critically evaluated the views of Ballard and Robinson andargued that the decisions of the parents could be inefficient even ifthe credit markets are perfect and there are altruistic transfers. More specifically, they argued that when parents are not altruistic enough,there is a ‘rotten parents effect’ in which parents ‘rationally sacrifice some childhood utility’ and ‘choose a level of child labour that is inefficiently high’.

V. Evidence related with the phenomenon of child labour

The child labour has been the subject of a thorough study and research and there are a lot of theories that have been stated in aneffort to define the causes of the specific problem. Towards thisdirection there have been a number of facts or existing situations thathave been used to explain the relation of the child labour with somespecific factors . One of the most known reasons for the existence andthe increase of the problem is the poverty of the household which is related with the general aspect of the modern way of life (as it hasbeen formulated under the influence of the technology) and also the fact that parents when have a low level of income  do not tend to invest in the education of their children in order to achieve a high level of return (education can help to the improvement of the status of life through the increase of the level of consumption).

We could also state that the income of the children can help toameliorate the conditions of life of the family and this could be thereason why the children tend to leave the school and work when their family is under severe financial pressure. This is an opinion that tries to explain the child labour through the life circumstances of a child and aims to smooth the negative consequences of the child labour.

Although the poverty  is usually presented as the main reason for thechild labour , there are some aspects that need to be taken intoaccount when examining the problem. First of all, we cannot define withaccuracy the financial benefit of a family from a child’s work. Of course, child labour can help to the amelioration of the family’s financial situation, however it is not obvious how much worse off afamily would be if the children were in school. On the other hand, we could not specify the time needed for the economic development to beachieved in order for the child labour to be abolished. More specifically it seems that there is no consistent threshold of economic development, which preceded the decline of child labour to suggest the implied relationship between economic growth and declice of child labour (M. Majumdar).

In such a case, the argument about the poverty criterion of child labour can loose its significant content. We should notice that, no matter which is the financial situation of the family,even in cases of exremely low level of living, the participation of thechild to a work that could characterized as ‘hazardous’ cannot bejustified as the protection of the child’s rights are a priority.

Moreover, the child labour although can help temporarily to theconfrontation of the poverty – up to a specific point – however, it canalso create the basis for the development of property – by generatingpoor people to the next generation. If the child returns to school theyhave more chances to a higher level of earnings in the future or at aleast to a job that will secure their living to certain standards(avoiding the condition of poverty). The combination of these two factors could also create a better investment and a greater security of income for the family by eliminating the obstacles of poverty.

The relationship between the poverty and the child labour is not absolutely proved. S.E. Dessy and D. Vencatachellum examined the issue using a sample of 83 countries and found that the coefficient of correlation between the incidence of child labour and the logarithm of gross national product is –0.74. In this way, they were directed to the assumption that child labour declines with economic prosperity, as parents feel relaxed regarding the credit constraints.

However, at a next level, they found that there are countries with similar levels of gross domestic product per capita that differ in the percentage of child labour. In fact, some of them report no child labour, where as others report a high level. This assumption is also in accordance withthe view of Anker (2000) who stated that although poverty is positively correlated with child labour, there are also other factors that can reduce the school enrolment rate of a country.

Hussain M. and Maskus K.E (2003) used a series of data from 64 countries in the period 1960 – 1980 to investigate a series of testable hypotheses about the causes of child labour. Their research showed that the incidence of child labour is negatively related to parental huma ncapital and education quality, but it is positively correlated with education cost and also that countries with higher amounts of child labour tend to have lower stocks of human capital in the future. They also found that there is a convergence phenomenon between the level and growth of human capital, i.e. the lower the current stock of human capital, the higher is current child-labour use and the fasted is the growth rate of human capital.

G. Hazarika and A. S. Bedi (2003), examined the relationship between the schooling costs and the extra household child labour supply and found that these two elements are positively related.  Moreover, the intra-household labour of children engaged in market work evaluated as unresponsive to changes in schooling costs. This happens maybe,according to Hazarika and Bedi because parents tend to consider children’s extra household labour and schooling as substitutes while they view intra household child labour activity differently. But if the parents could evaluate the intra-household child labour as an activity that offers more benefits than just an increase of the household consumption, then it could be a relationship between the intra-household child labour and the schooling costs. As for Pakistan(where this research refers) the intra-household child labour and schooling are not substitutes.

We should also mention the importance of social norms and the cultureto the appearance and the extension of the child labour. The above analysis has to be done under different variables for the rural areas as opposite to the urban areas. Children that live in the first environment tend to help to the everyday activities in the farm and asa result, their work under these circumstances is presented as justified and necessary. As for the social norms, their role is considered as very important to the financial growth, as they have to power to influence the economic and social behaviour of the vastmajority of people. The most indicative example of their influence isthe fact that in areas where the work of children is accepted by thepeople, then the decision of a parent to send his child to work can bemuch more easy.

Another very important aspect of the child labour is that is usually associated with the child abuse. Under this aspect, the reasons for the participation of the children to the labour market can be found in the demand of employers for cheap laborers and in the existence of selfish parents who do not mind sending their children to work if – in that way– there are more chances for them (parents) to rest. According to K.Basu and P. H. Van, although the child abuse does occur in allsocieties, the phenomenon of the child labour as a mass in most of developing countries is much more related with the poverty that characterises these countries. They refer to the example of England(late eighteenth and early nineteenth century) where parents had to send their children to work because they were obligated from the circumstances (poverty) to do so.

VI. Conclusion

The existence and the rapid extension of the phenomenon of child labour seems to be connected with the a series of external factors(like the low economic growth or the unadequate social policies of aspecific country) however it can be assumed by the analysis made abovethat it is also directly depended on the child’s ‘close’ social environment, i.e the family. It’s for this reason that the measures taken towards its elimination have to be referred into both these areas. The two sides have to co-operate and act simultaneously in order to confront this very important problem.

The ‘solution’ (as it is often presented) of the child labour has to be interpreted under different criteria regarding the specific circumstances that it will have to occur. Although in certain occasions the entrance of the child in the labour market seems to be the only left choice, we have to bear in mind its particular physic and mental weakness (that follows its age) and evaluate the consequences for such a decision. In any case, we have to consider that a workplace that operates normally with the use of adult laborers can have negative effects when the issue refers to a child.

Although the problem of the child labour is very important to its nature and its extension, the measures taken to its elimination don’t seem to produce any result. The conflict of interests towards its continuation has a great responsibility to it. And these interests refer to different parties (external and internal as mentioned above).This reality must be admitted and the efforts should be directed to the modification of the existing conditions trying not to confront directly the problem but asking the parties involved to participate to its solution by offering them a satisfactory exchange for their help.

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