Labor market reform and incidence of child labor in a developing economy

The paper is purported to examine the consequences of possible labor market reform in the developing economies on the incidence of child labor and economic well-being of the child labor supplying families. A two-sector, full-employment general equilibrium structure with child labor and imperfection in the market for adult labor has been used for the analytical purpose. Although this policy is likely to lower the incidence of child labor the welfare of the families supplying child labor worsens. The paper, therefore, questions the desirability of a policy designed at mitigating the child labor problem especially when it makes the poor families worse off.

Research highlights► Effects of labor market reform on child labor incidence have been theoretically examined. ► Labor market reform is likely to lower the incidence of child labor in the society. ► Welfare of the families supplying child labor worsens. ► We question the desirability of a policy that makes the poor families worse off.