Child Labor and Trade Liberalization in Indonesia
We examine the effects of trade liberalization on child work in Indonesia. Our estimation strategy identifies geographical differences in the effects of trade policy through district level exposure to reduction in import tariff barriers. We use a balanced panel of 261 districts, based on four rounds (1993 to 2002) of the Indonesian annual national household survey (Susenas), and relate workforce participation of children aged 10-15 to geographic variation in relative tariff exposure. Our main findings show that increased exposure to trade liberalization is associated with a decrease in child work among the 10 to 15 year olds. The effects of tariff reductions are strongest for children from low skill backgrounds and in rural areas. Favorable income effects for the poor, induced by trade liberalization, are likely to be the dominating effects underlying these results.
|Keywords||Indonesia, child labor, poverty, trade liberalization|
|JEL||Fertility; Family Planning; Child Care; Children; Youth (jel J13), Human Resources; Human Development; Income Distribution; Migration (jel O15), Trade Policy; Factor Movement Policy; Foreign Exchange Policy (jel O24)|
|Publisher||IZA - Institute for the Study of Labor - Forschungsinstitut zur Zukunft der Arbeit|
Kis-Katos, K, & Sparrow, R.A. (2009). Child Labor and Trade Liberalization in Indonesia. ISS Staff Group 1: Economics of Sustainable Development. IZA - Institute for the Study of Labor - Forschungsinstitut zur Zukunft der Arbeit. Retrieved from http://hdl.handle.net/1765/17453