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Chapter 14 Informed Buyers and Trade Sanction against Child Labour: Does It Work?

Contemporary and Emerging Issues in Trade Theory and Policy

ISBN: 978-0-4445-3190-2, eISBN: 978-1-84950-541-3

ISSN: 1574-8715

Publication date: 2 June 2008

Abstract

With product labelling has already been in vogue in the developed countries to distinguish products produced by child labour from those that are “child labour free” to influence the buyers’ choice, one might be tempted to suggest that such labels should contain more information regarding the extent to which child labour has been used in a product. But, as this chapter shows, if labels contain such information and the buyers react to this by offering increasingly lower prices for the varieties containing more child labour per unit of output, it may do more harm than helping the cause. That is, a trade sanction against child labour content of a good exported by developing countries may not be a good idea since it may, in fact, raise the incidence of child labour in those countries. This result is established in a simple general equilibrium framework where parents are altruist.

Keywords

Citation

Acharyya, R. (2008), "Chapter 14 Informed Buyers and Trade Sanction against Child Labour: Does It Work?", Marjit, S. and Yu, E.S.H. (Ed.) Contemporary and Emerging Issues in Trade Theory and Policy (Frontiers of Economics and Globalization, Vol. 4), Emerald Group Publishing Limited, Bingley, pp. 275-296. https://doi.org/10.1016/S1574-8715(08)04014-1

Publisher

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Emerald Group Publishing Limited

Copyright © 2008, Emerald Group Publishing Limited