Good intentions with perverse consequences

We all agree that child labor is undesirable and some action is required to end it. Developed-country governments and consumer groups generally pressure developing countries to discourage child labor via consumer boycotts and imposing international labor standards.  That sounds as a very noble thing to do but in a recent study Matthias Doepke and Fabrizio Zilibotti found that international activism against child labor might be instead  contributing to the persistence of the problem.

How is this possible? They found that international activism is associated with a reduction of child labor in the formal sector, displacing those kids to the informal sector and reducing the competition between children and low skilled workers. Unskilled workers have then an incentive to reduce support to child-labor regulation undermining for political reform.  This channel might seem weak at first since it is difficult to think that unskilled workers have more power than other groups purely moved by humanitarian reason.  In fact, they found that  in most of the developing countries the most important group pressuring for reform were labor unions representing unskilled workers.

This suggest that even though it is demanding to fight against child-labor in developing countries, it is very important to reevaluate the policy options for the international community.  Maybe the best way to address the problem is to support domestic programs that incentive parents  to keep kids at school (Such as PROGRESA in Mexico, “Familias en accion” in Colombia or “Bolsa Familia” in Brazil) and reward them in monetary terms for choosing education over labor for their kids.  Or even programs where the target is to increase family planning.

This is a good message for those interested in ending child labor in the world. Maybe there are better ways to achieve their objective.