Buying out child labor

In this paper we view child labor as a negative externality exerted by some poor countries on richer nations. We inquire into the feasibility of international transfers as a way of addressing this externality. We build a two-country growth model with human capital and child labor. We then calibrate our model to the United States and a poor country, solve it numerically and provide a quantitative description of the minimum transfers necessary to induce the poor to give up child labor. We then check their sustainability from the point of view of the rich.