children education labor and land in the long run and short run the paper uses an overlapping generations model to examine the effects of an increase in a household s land ownership on child labor consistent with previous studies it found that small increases in land lead to increased child labor however as land continues to increase child labor declines further even when an increase in land ownership causes an immediate rise in child labor there are contexts where long run child labor that is aggregated over progenies declines jel o10 d13 e20

credit constraints and the phenomenon of child labor abstract this paper develops an overlapping generations general equilibrium model where inefficient child labor arises due to credit constraints it derives a positive relationship between inequality in the distribution of income and the incidence of child labor looking at policy implications it shows how trade sanctions against countries using child labor may fail to reduce the incidence of child labor it discusses some alternative policies to reduce the incidence of child labor

the demographic transition and the emergence of sustained economic growth the demographic transition that swept the world in the course of the last century has been identified as one of the prime forces in the transition from stagnation to growth the unprecedented increase in population growth during the early stages of industrialization was ultimately reversed and the demographic transition brought about a significant reduction in fertility rates and population growth in various regions of the world enabling economies to convert a larger share of the fruits of factor accumulation and technological progress into growth of income per capita this paper examines various mechanisms that have been proposed as possible triggers for the demographic transition assessing their empirical validity and their potential role in the transition from stagnation to growth jel o11 o14 o33 o40 j11 j13

fiscal policy expectation traps and child labor i introduction child labor is widespread in the contemporary world in fact the international labor organization ilo estimates that 246 million of the world s children aged 5 17 or 16 are child laborers most living in developing countries 1 recently there has been renewed interest in this topic among economists which has led to a series of theoretical studies with the aim of better understanding the causes and consequences of child labor in order to help guide appropriate policy responses as in grootaert and kanbur 1995 basu 1999 and basu and tzannatos 2003 for useful literature surveys typically theoretical models designed to address the important policy issues surrounding child labor posit that a family s decision to send a child to the labor market is taken only as a last resort in order to escape the dire consequences of poverty for example basu and van 1998 baland and robinson 2000 show that this response on the part of the family may be stronger in a dynamic setting because contracts between children and adults are not self enforcing and capital markets are incomplete 2 in this case an adult decision maker may not only send their children to work to escape poverty in the present but do so to escape poverty in the future as well this decision will hinder a child s ability to accumulate human capital and can lead to persistent cycles of poverty and child labor across generations 3 we begin by showing that a benevolent government can address the incidence of child labor that results from the non enforceability of intergenerational contracts and incomplete capital markets through the appropriate use of fiscal policy and that this policy is pareto improving it is then shown that if society s confidence in their government is incomplete this lack of confidence can render the same fiscal policy ineffective in other words if households do not believe that the government will follow through on their policy promise then in fact it is quite possible that the government will not be able to follow through on their promise as a result of these beliefs 4 this self reinforcing nature of fiscal policy in the presence of uncertainty can leave a country in an expectations trap with a low level of human capital and child labor 5 to formally demonstrate this fiscal policy expectations trap hypothesis we employ a three period overlapping generations model in which child labor exists 6 this stylized setup will keep the dynamics manageable and allow us to highlight the effects of uncertainty also within this framework we introduce a missing intergenerational contracts market in conjunction with a human capital production function that exhibits a threshold with respect to parental human capital which gives rise to two locally stable steady states there is a good equilibrium where there is a relatively high level of parental human capital which results in a high level of income and no child labor and there is a bad equilibrium where there is a relatively low level of parental human capital which results in a low level of income and positive child labor this low income child labor equilibrium is the standard poverty trap scenario that typically exists in a deterministic economy with multiple equilibria it is then shown that a benevolent government can replicate the missing intergenerational contracts market with a pay as you go social security program thereby eliminating this component of child labor in an economy with perfect foresight in addition it is also shown that this policy is pareto improving in the sense that all generations are strictly better off under this policy except the initial old who are no worse off the dynamics of this social security program are intuitive if child labor is one possible mechanism adults can use to redistribute resources from their children then the government can reduce this incentive by announcing a social security program that will begin during the current adults old age an institutional intergenerational contract

state characteristics and the location of foreign direct investment within the united states a conditional logit model of the location decision of foreign firms investing in manufacturing facilities in the united states is developed and estimated the authors results for 1981 83 indicate that states with higher per capita incomes and higher densities of manufacturing activity attracted relatively more foreign direct investment in addition higher wages deterred foreign direct investment while higher unemployment rates attracted it surprisingly higher unionization rates were associated with increased foreign direct investment overall higher taxes deterred foreign direct investment however more extensive transportation infrastructures and larger promotional expenditures were associated with increased foreign direct investment copyright 1991 by mit press

differential fertility human capital and development using micro data from 48 developing countries this paper studies changes in crosssectional patterns of fertility and child investment over the course of the demographic transition before 1960 children from larger families obtained more education in large part because they had richer and more educated parents by century s end these patterns had reversed consequently fertility differentials by income and education historically raised the average education of the next generation but they now reduce it while the reversal is unrelated to changes in gdp per capita women s work sectoral composition or health roughly half is attributable to rising aggregate education in the parents generation the results support a model in which rising skill returns lowered the minimum income at which parents invest in education

public provision of private child goods abstract this paper analyzes the public provision of private goods for children in a politico economic model with endogenous fertility the government provides every child with goods that can also be purchased by parents in private markets and the level of provision is determined by majority rule households with many children benefit from the public provision more than those with fewer children thus a political conflict arises between them the distribution of the number of children across households which is a crucial factor for determining which group is politically dominant is endogenously determined by households fertility decision the sequential interaction between fertility and political decisions might lead to multiple equilibria equilibrium with high fertility and low private public spending ratio and equilibrium with low fertility and high private public spending ratio our model could explain the large differences in fertility and structure of child related spending across countries

the gender gap fertility and growth changes in fertility have long been recognized as important correlates of economic growth with the relationship between the level of fertility and the level of income per capita being one of the strongest observable correlations in cross country data this paper examines the linkages between fertility and growth theory the structure of the model is presented in sections on production couples decision making system dynamics and steady state equilibria the first component of the model is that increases in capital per worker raise womens relative wages since capital is more complementary to womens labor input than to mens the second component is that increasing womens relative wages reduces fertility by raising the cost of children more than household income finally lower fertility raises the level of capital per worker a positive feedback loop generates demographic transition a rapid decline in fertility accompanied by accelerated output growth

from physical to human capital accumulation inequality and the process of development this paper develops a growth theory that captures the replacement of physical capital accumulation by human capital accumulation as a prime engine of growth along the process of development it argues that the positive impact of inequality on the growth process was reversed in this process in early stages of the industrial revolution when physical capital accumulation was the prime source of growth inequality stimulated development by channelling resources towards individuals with a higher propensity to save as human capital emerged as a growth engine equality alleviated adverse effects of credit constraints on human capital accumulation stimulating the growth process this research develops a growth theory that captures the endogenous replacement of physical capital accumulation by human capital accumulation as a prime engine of economic growth in the transition from the industrial revolution to modern growth the proposed theory offers a unified account for the effect of income inequality on the growth process during this transition it argues that the replacement of physical capital accumulation by human capital accumulation as a prime engine of economic growth changed the qualitative impact of inequality on the process of development in the early stages of the industrial revolution when physical capital accumulation was the prime source of economic growth inequality enhanced the process of development by channelling resources towards individuals whose marginal propensity to save is higher in the later stages of the transition to modern growth as human capital emerged as a prime engine of economic growth equality alleviated the adverse effect of credit constraints on human capital accumulation and stimulated the growth process the proposed theory unifies two fundamental approaches regarding the effect of income distribution on the process of development the classical approach and the credit market imperfection approach 1 the classical approach was originated by smith 1776 and was further interpreted and developed by keynes 1920 lewis 1954 kaldor 1957 and bourguignon 1981 according to this approach saving rates are an increasing function of wealth and inequality therefore channels resources towards individuals whose marginal propensity to save 1 the socio political economy approach provides an alternative mechanism equality diminishes the tendency for socio political instability or distortionary redistribution and hence it stimulates investment and economic growth see the comprehensive survey of benabou 1996b

inter city competition for foreign investment static and dynamic effects of china s incentive areas abstract china s open door policy has created a natural experiment for studying agglomeration externalities and the role of incentives designed to attract foreign direct investment we build a model which predicts that foreign firms will prefer cities where other foreign firms are located we estimate the model using data on 931 foreign ventures we then use simulations to explore the effect policies favoring particular cities had on the distribution of investment we find that attractive cities those with good infrastructure and an established industrial base gained most and that agglomeration effects greatly magnified the direct impact of policy

a median voter model of social security this paper presents a theoretical median voter analysis of the determination of the level of social security the framework for the analysis is a continuous time overlapping generations model with nonaltruistic households facing borrowing constraints in the capital market a majority voting equilibrium is shown to exist in which the median voter is liquidity constrained the desired level of social security for each voter is a declining function of the preexisting level of social security as a consequence in a sequence of votes on social security beginning with a zero level the program initially overshoots its steady state value copyright 1989 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

welfare impact of a ban on child labor i introduction the issue of child labor has recently been the subject of a surge in formal economic analysis according to the international labor organization 2006 there has been a significant decrease in child labor and an even steeper decline in hazardous child labor nevertheless in 2004 there were still 218 million child laborers of whom 126 million were in hazardous work the increase in research around this topic is in part the result of the growing awareness of the persistence of child labor around the world and the importance of developing theoretical models that help us understand the incidence of child labor and its implications as only then can we recommend and implement effective policy interventions the economics literature is ambiguous on the desirability of a ban on child labor child labor is typically viewed as the result of some deeper problem in the economy and addressing child labor without solving the problem that leads to its occurrence can make children worse off for example dessy and pallage 2005 present an environment where although child labor has a negative direct impact on children s well being it is the best available choice for children hence a ban on child labor even on its worst forms deprives children of their best possible choice and can make children worse off standard arguments for the imposition of restrictions on child labor are based on the existence of externalities such as positive externalities from a well educated population see udry 2006 a ban on child labor leads children to allocate more resources to education brings the average levels of human capital closer to the optimal and consequently increases welfare constraining the amount of labor supplied by children is also often suggested as an instrument to move the economy toward a desired equilibrium in environments where multiple equilibria can emerge as in dessy and pallage 2001 and basu and van 1998 banning child labor can also be an instrument to achieve increases in efficiency in the presence of capital market imperfections in baland and robinson 2000 capital market imperfections do not allow altruistic parents to internalize the negative impact of child labor on children s human capital accumulation a restriction on the amount of time allocated to work by children is suggested to reduce the resulting inefficiently high levels of child labor finally rogers and swinnerton 2002 advance parents incomplete information on the type of work safe or hazardous their children perform as an argument for a ban on the worst forms of child labor 1 in this article i show that in a standard overlapping generations economy with parental altruism calibrated to the 1880s a ban on child labor increases parental transfers and raises children s as well as the average levels of welfare in the short run and in the long run this result introduces a new rationale for imposing restric ons on child labor adding to a debate still in its early stages of development 2 in an overlapping generations economy with altruism the unconstrained nash cournot equilibrium does not maximize the average welfare of currently living agents as was shown in bernheim 1989 nor the welfare of children and generates suboptimal levels of parental transfers by reducing the income earned by children a ban on child labor reduces children s consumption raising their marginal utility of consumption and parents respond by increasing transfers to children hence the ban places children at a point in their parents reaction function that results in a higher level of parental transfers by inducing an increase in parental transfers the ban on child labor moves the economy closer to the social optimal generating aggregate welfare gains children are made better off because they receive more transfers and do not work parents are made worse off because they need to decrease consumption and leisure to increase parental transfers however the raise in their children s lifetime utility partially offsets this effect

from malthusian stagnation to modern growth this paper investigates the historical evolution of the relationship among population growth technological change and standard of living the analysis focuses on two most important differences among the malthusian regime post malthusian regime and modern growth regime these were the behavior of income per capita and the relationship between the level of income per capita and the population growth rate the modern growth regime is characterized by steady growth in both income per capita and the level of technology in the malthusian regime technological progress and population growth was glacial by modern standards and income per capita was fairly constant in contrast to the modern growth regime the relationship between per capita income and population growth in the malthusian regime was positive post malthusian regime shared one characteristic with each of the two regimes in addition this paper developed and described an endogenous growth model consistent with the above mentioned transition process

cheap children and the persistence of poverty this paper develops a theory of fertility that offers an explanation for the persistence of poverty within and across countries if educated individuals have a comparative advantage in raising educated children then parental fertility choice is shown to give rise to a poverty trap in which the poor choose high fertility rates with low investment in child quality moreover the impact of child quality choice on economic performance is amplified by the diluting effect of higher fertility on physical capital accumulation the theory proposes insights regarding the effects of inequality globalisation and life expectancy on economic growth and demographic transitions this paper develops a theory of fertility and child educational choice that offers an explanation for the persistence of poverty within and across countries the joint determination of the quality education and quantity of children in a household is studied under the key assumption that individuals productivity as teachers increases with their own human capital in contrast the minimum time cost associated with raising a child regardless of the child s quality the quantity cost is not affected by parental education as a result the price of child quantity relative to the price of child quality increases with individuals wages in particular for low wage individuals for whom the opportunity cost of time is low children of minimal quality are cheap this assumption therefore generates a comparative advantage for the poor in child quantity whereas high wage educated individuals have a comparative advantage in raising quality children consistent with the well known evidence poor households thus choose relatively high fertility rates with relatively low investment in their offspring s education and therefore their offspring are poor as well in contrast high income families choose low fertility rates with high investment in education and therefore high income persists in the dynasty evidence from the us provided by hanushek 1992 suggests that a trade off between quantity and quality of children does indeed exist hanushek argues that movements in family size could explain over half the variance in some test scores and that the elasticity of achievements with respect to the number of children in the family is 0 03 implying that the annual achievement growth of each child in a family will fall about 2 when a second child is added and about 0 5 when a sixth child is added 1

labour market deregulation flexibility and innovation labour flexibility is often portrayed as important to competitive success using evidence from an original survey of uk firms this paper investigates the relationships between firms use of on the one hand various flexible work practices human resource management techniques and industrial relations systems and on the other hand the innovative activities of those firms our results suggest that the sort of low road labour flexibility practices encouraged by labour market deregulation short term and temporary contracts a lack of employer commitment to job security low levels of training and so on are negatively correlated with innovation

child labor and the labor supply of other household members evidence from 1920 america this paper analyses the effect of child labor on household labor supply using 1920 us census micro data the aim of the analysis is to understand who in the household benefits from child labor in order to identify a source of exogenous variation in child labor i use state specific child labor laws i find that a rise in the proportion of working children by household is associated with no variation in parents labor supply i also find a strong negative externality among children as the proportion of working children by household rises everything else equal the probability that each child works falls while the probability that he attends school rises this suggests that parents redistribute entirely the returns from child labor to the children in the household consistent with a model of household labor supply with fully altruistic parents

playing the fertility game at work an equilibrium model of peer effects we study workplace peer effects in fertility decisions using a game theory model of strategic interactions among coworkers that allows for multiple equilibria using register based data on fertile aged women working in medium sized establishments in denmark we uncover negative average peer effects allowing for heterogeneous effects by worker type we find that positive effects dominate across worker types defined by age or education negative effects dominate within age groups and among low education types policy simulations show that these estimated effects make the distribution of where women work an important consideration beyond simply if they work in predicting population fertility

a theory of political transitions we develop a theory of political transitions inspired by the experiences of western europe and latin america nondemocratic societies are controlled by a rich elite the initially disenfranchised poor can contest power by threatening revolution especially when the opportunity cost is low for example during recessions the threat of revolution may force the elite to democratize democracy may not consolidate because it is redistributive and so gives the elite an incentive to mount a coup highly unequal societies are less likely to consolidate democracy and may end up oscillating between regimes and suffer substantial fiscal volatility

does demographic change matter for growth abstract how important is the demographic transition for economic growth to answer this question this paper constructs a general equilibrium overlapping generations model with endogenous fertility the model is calibrated to data from taiwan a country that experienced rapid economic growth while undergoing significant demographic transition our results suggest that more than one third of the output growth in taiwan during the past four decades can be attributed to demographic transition while tfp growth explains another third and the remainder is mainly due to skill biased technological progress our results show that demographic change is an important driver of the growth process in countries undergoing rapid fertility decline

the economics of child labor if child labor as a mass phenomenon occurs not because of parental selfishness but because of the parents concern for the household s survival the popular argument for banning child labor loses much of its force however this assumption about parental decision making coupled with the assumption of substitutability in production between child and adult labor could result in multiple equilibria in the labor market with one equilibrium where children work and another where adult wage is high and children do not work the paper establishes this result and discusses its policy implications copyright 1998 by american economic association

the determinants of fdi location choice in china a discrete choice analysis this study addresses two questions what are the determinants of foreign direct investment fdi location choice in china what are the factors that determine investors choice between economic zo

the historical fertility transition a guide for economists the historical fertility transition is the process by which much of europe and north america went from high to low fertility in the nineteenth and early twentieth centuries this transformation is central to recent accounts of long run economic growth prior to the transition women bore as many as eight children each and the elasticity of fertility with respect to incomes was positive today many women have no children at all and the elasticity of fertility with respect to incomes is zero or even negative this paper discusses the large literature on the historical fertility transition focusing on what we do and do not know about the process i stress some possible misunderstandings of the demographic literature and discuss an agenda for future work jel i12 j13 n30

socially optimal social security and education subsidization in a dynastic model with human capital externalities fertility and endogenous growth abstract this paper considers socially optimal government policies in a dynastic family model with physical capital human capital endogenous fertility and positive spillovers from average human capital such spillovers reduce human capital investment but raise fertility from their social optimum we first characterize the social optimum with a non convex feasible set due to the quantity quality tradeoff concerning children we then show that social security and education subsidization together financed by labor income taxes can fully eliminate the efficiency losses of the spillovers and achieve the social optimum under plausible conditions however none of the policies can do so alone

inequality in landownership the emergence of human capital promoting institutions and the great divergence this paper suggests that inequality in the distribution of landownership adversely affected the emergence of human capital promoting institutions e g public schooling and thus the pace and the nature of the transition from an agricultural to an industrial economy contributing to the emergence of the great divergence in income per capita across countries the prediction of the theory regarding the adverse effect of the concentration of landownership on education expenditure is established empirically based on evidence from the beginning of the 20th century in the u s

social class and the spirit of capitalism one of the key social transformations that accompanied the british industrial revolution was the economic decline of the aristocracy standard theories of wealth inequality cannot explain why the aristocrats in spite of their superior wealth and education failed to be the main protagonists and beneficiaries of industrialization we discuss recent research based on a model of endogenous preferences that is consistent with the demise of aristocracy jel 010 040

corruption fertility and human capital abstract we build an overlapping generations model in which reproductive households face a child quantity child quality trade off and bureaucrats are delegated with the task of delivering public services that support the accumulation of human capital by integrating the theoretical analyses of endogenous growth corruption and fertility choices we show that the negative relation between fertility and economic development may also be affected by differences in the magnitude of bureaucratic corruption

evaluating innovation and labour market relationships the case of italy in this paper the link between labour market flexibility and innovation is analysed paying particular attention to the different technological regimes of economic activities and the different geographical areas of the italian economy a dynamic panel data specification is used to assess the endogenous relationship between patents included as a proxy of the innovation and job turnover and wages which represent labour market indicators the results show that higher job turnover only has a significant and negative impact on patent activities in regional sectors of northern italy while a positive and significant impact of blue and white collar wages has been generally found

modes of labor flexibility at firm level are there any implications for performance and innovation evidence for the swiss economy the aim of this study is to define and measure numerical and functional labor flexibility at the firm level and investigate empirically the impact of each of these flexibility modes on performance and innovation measures as well as the interrelationship between them our estimation equation contains besides the classical production factors labor and physical capital information and communication technologies ict capital human capital variables for flexible organizational practices as well as measures for numerical labor flexibility the empirical investigation is based on data for about 1400 swiss firms copyright 2005 oxford university press

income distribution and macroeconomics this paper analyzes the role of wealth distribution in macroeconomics through investment in human capital it is shown that in the presence of credit markets imperfections and indivisibilities in investment in human capital the initial distribution of wealth affects aggregate output and investment both in the short and in the long run as there are multiple steady states this paper therefore provides an additional explanation for the persistent differences in per capita output across countries furthermore the paper shows that cross country differences in macroeconomic adjustment to aggregate shocks can be attributed among other factors to differences in wealth and income distribution across countries

public versus private education when differential fertility matters we assess the merits of different education systems in a framework that accounts for the joint decision problem of parents regarding fertility and education specifically we compare the implications of a public and a private schooling regime for economic growth and inequality we find that private schooling leads to higher growth when there is little inequality in human capital endowments across families in contrast when inequality is high public education yields higher growth by reducing fertility differentials in addition public schooling leads to income convergence while private schooling can result in ever increasing inequality our analysis highlights theimp ortanceof accounting for endogenous fertility differentials when analyzing educational policies

agglomeration economies and location choice of korean manufacturers within the united states employing the micro data for 1997 2004 we investigate the location decision of korean affiliated manufacturing investments in the united states the conditional logit estimates confirm that although industry specific korean agglomeration and domestic agglomeration play an important role the foreign direct investment fdi location is more sensitively affected by the interstate difference in endowment conditions than by the same nationality agglomeration both business service and intermediate good agglomeration are main determinants of fdi location furthermore estimation results show substantial change in the location pattern after recovery from the asian financial crisis we find quite different patterns of location decision across industry groups dispersion forces work greater than the agglomeration force in the consumer goods industry forward linkages with us upstream firms can be seen in the assembly and processing industry and typical follow the leader pattern mixed with market potential effec

do family wealth shocks affect fertility choices evidence from the housing market abstract this paper uses wealth changes driven by housing market variation to estimate the effect of family resources on fertility decisions using data from the panel study of income dynamics we show that a 100 000 increase in housing wealth among home owners causes a 16 to 18 increase in the probability of having a child there is no evidence of an effect of msa level housing price growth on the fertility of renters however we also present evidence that housing wealth growth increases total fertility and that the responsiveness of fertility to housing wealth has increased over time commensurate with the recent housing boom

child labor cause consequence and cure with remarks on international labor standards although the literature on child labor is enormous it lacks a common theoretical foundation in this paper analytical survey of this field is provided keeping in mind that this is an area where the primary reason for theorizing is ultimately to influence policy overall it is noted that the literature on child labor is an illustration of abundance and anarchy although empirical writings on child labor are numerous they are not usually founded on theory it is argued that there is much that can be done in curbing the issue of child labor several theories were studied in this paper including collaborative intervention such efforts include public action which alters the economic environment such that the parents of their own accord prefer to withdraw the child from labor force another strategy involves the government a legal intervention is enforcing a total ban on the subject although such interventions have good intentions some of them may not be feasible in general it is better to take economy wide measures against child labor and if there is to be a sector specific ban it should be based on the working conditions of that sector rather than the destination of the goods

das human kapital a theory of the demise of the class structure this paper suggests that the demise of the capitalists workers class structure was a socio economic transformation orchestrated by the capitalists in reaction to the increasing importance of human capital in sustaining their profit rates physical capital accumulation in the process of industrialization enhanced the importance of human capital in production and generated incentives for capitalists to support the provision of public education for the masses triggering the demise of the existing class structure the implications of the theory are consistent with the voting patterns on england s education reform of 1902

is child labor inefficient we build a model of child labor and study its implications for welfare we assume that there is a trade off between child labor and the accumulation of human capital even if parents are altruistic and child labor is socially inefficient it may arise in equilibrium because parents fail to fully internalize its negative effects this occurs when bequests are zero or when capital markets are imperfect we also study the effects of a simple ban on child labor and derive conditions under which it may be pareto improving in general equilibrium we show that the implications of child labor for fertility are ambiguous

international labor standards and the political economy of child labor regulation child labor is a persistent phenomenon in many developing countries in recent years support has been growing among rich country governments and consumer groups for the use of trade policies such as product boycotts and the imposition of international labor standards to reduce child labor in poor countries in this paper we discuss research on the long run implications of such policies in particular we demonstrate that such measures may have the unintended side effect of lowering domestic support for banning child labor within developing countries and thus may contribute to the persistence of the child labor problem jel i21 j88 o11 o19 o24

is product boycott a good idea for controlling child labor a theoretical investigation abstract a popular form of action to curb child labor and uphold international labor standards in general is a product boycott by consumers there are labeling agencies that inform us if for instance a carpet or a hand stitched soccer ball is free of child labor the presence of a consumer boycott will typically mean that products tainted by child labor will command a lower price on the market than ones certified to be untainted it is popularly presumed that such consumer activism is desirable the paper formally investigates this presumption and shows that consumer product boycotts can in a wide class of situations have an adverse reaction that causes child labor to rise rather than fall this happens under weak and plausible assumptions hence there has to be much greater caution in the use of consumer activism and one has to have much more detailed information about the context where child labor occurs before using a boycott

engines of liberation electricity was born at the dawn of the last century households were inundated with a flood of new consumer durables what was the impact of this consumer durable goods revolution it is argued here that the consumer goods revolution was conducive to liberating women from the home to analyse this hypothesis a beckerian model of household production is developed households must decide whether or not to adopt the new technologies and whether a married woman should work can such a model help to explain the rise in married female labour force participation that occurred in the last century yes the housewife of the future will be neither a slave to servants nor herself a drudge she will give less attention to the home because the home will need less she will be rather a domestic engineer than a domestic labourer with the greatest of all handmaidens electricity at her service this and other mechanical forces will so revolutionize the woman s world that a large portion of the aggregate of woman s energy will be conserved for use in broader more constructive fields thomas alva edison as interviewed in good housekeeping magazine lv no 4 october 1912 p 436

child labor and coordination failures abstract in this note we show that a technology based coordination failure may explain the emergence of laws restricting child labor child labor may arise because of the lack of a coordination mechanism between parental decisions to invest in the human capital of their children and firms decisions to invest in skill biased technologies legislative intervention in many cases helps coordinate expectations towards a pareto superior outcome with investments both in human capital and in skill biased technologies

child labor and schooling responses to access to microcredit in rural bangladesh microcredit has been shown to be effective in reducing poverty in many developing countries however less is known about its effect on human capital formation in this paper we develop a model examining the relation between microcredit and child labour we then empirically examine the impact of access to microcredit on children s education and child labour using a new and large data set from rural bangladesh we address the selection bias using the instrumental variable method where the instrument relies on an exogenous variation in treatment intensity among households in different villages the results show that household participation in a microcredit program may increase child labour and reduce school enrolment the adverse effects are more pronounced for girls than boys younger children are more adversely affected than their older siblings and the children of poorer and less educated households are affected most adversely our findings remain robust to different specifications and methods and when corrected for various sources of selection bias

school attendance and child labor a model of collective behavior this paper theoretically investigates how community approval or disap proval aects school attendance and child labor and how aggregate behavior of the community feeds back towards the formation and persistence of an anti or pro schooling norm the proposed community model continues to take aggregate and idiosyncratic poverty into account as an important driver of low school attendance and child labor but it provides also an explanation for why equally poor villages or regions can display dierent attitudes towards schooling distinguishing between three dierent modes of child time allocation school attendance work and leisure the paper shows how the time costs of schooling and child labor productivity con tribute to the existence of a locally stable anti schooling norm it proposes policies that eectively exploit the social dynamics and initiate a permanent escape from the anti schooling equilibrium an extension of the model explores how an education contingent subsidy paid to the poorest families of a community manages to initiate a bandwagon eect towards education for all the optimal mechanism design of

do labor market opportunities affect young women s work and family decisions experimental evidence from india do labor market opportunities for women affect marriage and fertility decisions we provided three years of recruiting services to help young women in randomly selected rural indian villages get jobs in the business process outsourcing industry because the industry was so new at the time of the study there was almost no awareness of these jobs allowing us in effect to exogenously increase women s labor force opportunities from the perspective of rural households we find that young women in treatment villages were significantly less likely to get married or have children during this period choosing instead to enter the labor market or obtain more schooling or postschool training women also report wanting to have fewer children and to work more steadily throughout their lifetime consistent with increased aspirations for a career copyright 2012 oxford university press

bounded rationality expectations and child labour this paper develops a model with overlapping generations where the household s optimal fertility child labour and education decisions depend on the parents expectations or beliefs about the return to education it is shown that there exists a range of parental income where the fertility rate is high and children participate in the labour market and receive an incomplete education if a parent believes the return to education is low the act of participating in the labour market reduces the child s ability to accumulate human capital thus the action of sending a child into the labour market is sufficient to ensure that the parents initially pessimistic expectations are fulfilled it is then shown that a one time policy intervention such as banning child labour and mandatory education can be enough to move a country from the positive child labour equilibrium to an equilibrium with no child labour rationalite limitee anticipations et travail des enfants ce memoire developpe un modele de chevauchement des generations ou la fecondite optimale du menage le travail des enfants et les decisions a propos de l education dependent des anticipations des parents ou de qu ils croient etre le rendement sur l education on montre qu il existe un eventail de revenus des parents pour lequel le taux de fecondite est eleve et les enfants participent au marche du travail et recoivent une education incomplete si un parent croit que le rendement sur l investissement en education est faible le fait d entrer sur le marche du travail reduit la capacite de l enfant a accumuler du capital humain et donc le fait de l envoyer sur le marche du travail est suffisant pour s assurer que les anticipations pessimistes du parent se realisent on montre qu une intervention ponctuelle de politique publique a un moment donne comme bannir le travail des enfants ou imposer l education obligatoire peut suffire pour deplacer un pays d un equilibre avec travail des enfants vers un equilibre sans travail des enfants

does compulsory school attendance affect schooling and earnings we establish that season of birth is related to educational attainment because of school start age policy and compulsory school attendance laws individuals born in the beginning of the year start school at an older age and can therefore drop out after completing less schooling than individuals born near the end of the year roughly 25 percent of potential dropouts remain in school because of compulsory schooling laws we estimate the impact of compulsory schooling on earnings by using quarter of birth as an instrument for education the instrumental variables estimate of the return to education is close to the ordinary least squares estimate suggesting that there is little bias in conventional estimates every developed country in the world has a compulsory schooling requirement yet little is known about the effect these laws have on educational attainment and earnings 1 this paper exploits an unusual natural experiment to estimate the impact of compulsory schooling laws in the united states the experiment stems from the fact that children born in different months of the year start school at different ages while compulsory schooling laws generally require students to remain in school until their sixteenth or seventeenth birthday in effect the interaction of school entry requirements and compulsory schooling laws compel students born

women s liberation what s in it for men the nineteenth century witnessed dramatic improvements in the legal rights of married women given that these changes took place long before women gained the right to vote they amounted to a voluntary renouncement of power by men in this paper we investigate men s incentives for sharing power with women in our model women s legal rights set the marital bargaining power of husbands and wives we show that men face a tradeoff between the rights they want for their own wives namely none and the rights of other women in the economy men prefer other men s wives to have rights because men care about their own daughters and because an expansion of women s rights increases educational investments in children we show that men may agree to relinquish some of their power once technological change increases the importance of human capital we corroborate our argument with historical evidence on the expansion of women s rights in england and the united states

on the distributional consequences of child labor legislation this article studies the effects of child labor legislation on human capital accumulation and the distribution of wealth and welfare we calibrate our model to u s data circa 1880 and find that the consequences of restricting child labor or providing tax financed education depend on the main source of individual household income households with significant financial assets unambiguously lose from government intervention whereas high wage workers benefit most from a child labor ban and low wage workers benefit most from free education introducing free education results in substantial welfare gains whereas a child labor ban induces small welfare losses

foreign aid fertility and human capital accumulation this paper analyses the effect of foreign aid on population growth and human capital accumulation consistent with empirical evidence from sub saharan africa the model shows that foreign aid can work against its stated goal of alleviating poverty and promoting growth humanitarian aid fosters population growth and adversely affects the recipients incentive to invest in human capital the analysis suggests that foreign aid may lock a recipient economy in a low equilibrium trap

the child is father of the man implications for the demographic transition we propose a new theory of the demographic transition based on the evidence from natural sciences that physical development during childhood affects adult life expectancy positively this theory is embodied in a continuous time olg framework where fertility longevity and education all result from individual decisions we conclude that a sustained improvement in physical development is at the basis of the observed demographic transition in today s developed countries and may be an important factor in explaining the slow transition from the malthusian towards the modern era the dynamics of the proposed model reproduce the key features of the demographic transition including sustained improvements in child physical development permanent increase in life expectancy a hump shaped evolution of both population growth and fertility and late increases in secondary educational attainments

little innovation many jobs an econometric analysis of the italian labour productivity crisis during the past twenty years italy has realized changes in labour legislation leading to a decentralization of wage bargaining and increased flexibility in labour relations both these factors have helped to curb wage growth and to enhance employment growth but have also led to a crisis in italian labour productivity growth our estimates among 3 000 firms show that firms with high shares of flexible workers a high labour turnover and lower costs of labour relative to capital experienced significantly lower rates of labour productivity growth our findings raise doubts about the mainstream call for flexibilisation of european labour markets we argue hat the italian shift towards a low productive and labour intensive growth path is problematic gainst the background of an ageing population

the macroeconomics of child labor regulation we develop a positive theory of the adoption of child labor laws workers who compete with children in the labor market support a child labor ban unless their own working children provide a large fraction of family income fertility decisions lock agents into specific political preferences and multiple steady states can arise the introduction of child labor laws can be triggered by skill biased technological change which induces parents to choose smaller families the theory can account for the observation that in britain regulations were first introduced after a period of rising wage inequality and coincided with rapid fertility decline

from malthus to modern growth can epidemics explain the three regimes we model demographic and economic long run development in a setting where mortality is endogenous and subject to epidemic shocks the model replicates the full transition from malthusian stagnation to modern growth consistent with the historical facts the economy also passes an intermediate post malthusian phase where growth rates of both population and per capita income increase simultaneously as mortality rates fall and become less volatile the escape from the malthusian trap is the result of a series of mild epidemic shocks making it inevitable at some stage but its timing random calibrations show that it can differ by thousands of generations absent differences in exogenous parameters

the survival of the welfare state this paper provides an analytical characterization of markov perfect equilibria in a model with repeated voting where agents vote over distortionary income redistribution a key result is that the future constituency for redistributive policies depends positively on current redistribution since this affects both private investments and the future distribution of voters the model features multiple equilibria in some equilibria positive redistribution persists forever in other equilibria even a majority of beneficiaries of redistribution vote strategically so as to induce the end of the welfare state next period skill biased technical change makes the survival of the welfare state less likely

to segregate or to integrate education politics and democracy how is the quality of public education affected by the presence of private schools for the rich theory and evidence suggest that the link depends crucially on the political system we develop a theory that integrates private education and fertility decisions with voting on public schooling expenditures we find that the presence of a large private education sector benefits public schools in a broad based democracy where politicians are responsive to low income families but crowds out public education spending in a society that is politically dominated by the rich the main predictions of the theory are consistent with state level data and micro data from the u s as well as cross country evidence from the programme for international student assessment study

altruism fertility and the value of children health policy evaluation and intergenerational welfare abstract this paper accounts for the value of children and future generations in the evaluation of health policies this is achieved through the incorporation of altruism and fertility in a value of life type of framework we are able to express adults willingness to pay for changes in child mortality and also to incorporate the welfare of future generations in the evaluation of current policies our model clarifies a series of puzzles from the literature on the value of life and on intergenerational welfare comparisons we show that by incorporating altruism and fertility into the analysis of the recent u s experience the estimated welfare gain of a young adult from reductions in mortality easily doubles

can internal migration foster the convergence in regional fertility rates evidence from 19th century france this paper offers an explanation for the convergence of fertility rates across french departements in the second half of the nineteenth century that emphasises the diffusion of information through internal migration it tests how migration affected fertility by building a decennial bilateral migration matrix between french departements for 1861 1911 the identification strategy uses exogenous variation in transportation costs resulting from the construction of railways the results suggest that the convergence towards low birth rates can be explained by the diffusion of cultural and economic information pertaining to low fertility behaviour by migrants especially by migrants to and from paris

rigidities through flexibility flexible labour and the rise of management bureaucracies judging from organisation level survey data we find that organisations employing high shares of flexible workers have higher shares of managers in their personnel this is in line with earlier findings that anglo saxon countries with deregulated labour markets have thicker management bureaucracies than countries with more regulated labour markets of the rhineland style we argue that flexibility in labour markets i e easier firing and higher labour turnover damages trust loyalty and commitment this requires more management and control related research suggests that easy hire and fire is at the cost of organisational learning knowledge accumulation and knowledge sharing thus damaging innovation and labour productivity growth

perverse consequences of well intentioned regulation evidence from india s child labor ban although bans against child labor are a ubiquitous policy tool there is very little empirical evidence on their effectiveness in this paper we examine the consequences of india s landmark legislation against child labor the child labor prohibition and regulation act of 1986 using data from employment surveys conducted before and after the ban and using age restrictions that determined whom the ban applied to we show that the relative probability of child employment increases and child wages relative to adult wages decrease after the ban our main specification relies on comparing changes in work probabilities over time for children of the same age but with siblings who are rendered either eligible or ineligible for legal work when the ban is implemented the increases in the probability of economic activity are largest for children i in areas where the industries targeted by the ban play a larger role in local labor markets ii in areas where the probability of employer inspections is higher and iii in families that are poorer these results are consistent with a theoretical model building on the seminal work of basu and van 1998 and basu 2005 where families use child labor to reach subsistence constraints and where child wages decrease in response to bans leading poor families to utilize more child labor we also find decreases in child participation in schooling for younger children only and no economically meaningful change in household outcomes like assets or calorie intake

income distribution and macroeconomics fertility adjustment prior to education investment abstract this paper develops a theory in which households prepare for future education by adjusting the quantity of children they intend to raise income inequality lowers output per worker only if the inequality is attributed in some part to unexpected disturbances after childbirth

the mystery of monogamy we examine why developed societies are monogamous while rich men through out history have typically practiced polygyny wealth inequality naturally pro duces multiple wives for rich men in a standard model of the marriage market however we demonstrate that higher female inequality in the marriage market reduces polygyny moreover we show that female inequality increases in the process of development as women are valued more for the quality of their chil dren than for the quantity consequently male inequality generates inequality in the number of wives per man in traditional societies but manifests itself as inequality in the quality of wives in developed societies jel j12 j16 j24 z13

long term determinants of the demographic transition 1870 2000 abstract this paper analyzes the long term economic determinants of the demographic transition using a large panel of countries since 1870 a simple theoretical framework accounts for the possibly nonmonotonic variations of fertility in the course of economic development as predicted by unified growth theory i find that primary schooling rather than income or health related variables is the most robust determinant of the fertility transition as regards the health transition both education and income are significant determinants of mortality rates but education alone accounts for the bulk of their time variation over the twentieth century thus education can be viewed as the main long term determinant of the demographic transition

the u s demographic transition between 1800 and 1940 the u s went through a dramatic demographic transition in 1800 the average woman had 7 children and 94 percent of the population lived in rural areas by 1940 the average woman birthed just 2 kids and only 43 percent of populace lived in the country the question is what accounted for this shift in the demographic landscape the answer given here is that technological progress in agriculture and manufacturing explains these facts

employment and distributional effects of restricting working time we study the employment and distributional effects of regulating reducing working time in a general equilibrium model with search matching frictions job creation entails fixed costs but existing jobs are subject to diminishing returns we characterize the equilibrium in the de regulated economy where firms and individual workers freely negotiate wages and hours then we consider the effects of a legislation restricting the maximum working time while we let wages respond endogenously employment effects are sensitive to the representation of preferences in our benchmark small reductions in working time starting from the laissez faire equilibrium solution always result in a small increase in the equilibrium employment while larger reductions reduce employment the regulation benefits workers both unemployed and employed even if wages decrease and even in cases where employment falls but reduces profits and output

population technology and growth from malthusian stagnation to the demographic transition and beyond this paper develops a unied growth model that captures the historical evolution of population technology and output it encompasses theendogenous transitionbetween three regimes that have characterized economic development the economy evolves from amalthusianregime wheretechnologicalprogressis slow andpopulationgrowthprevents anysustainedriseinincomepercapita intoapost malthusianregime wheretechnological progress rises and population growth absorbs only part of output growth ultimately a demographic transition reverses the positive relationship between income and population growth andtheeconomyentersamoderngrowthregimewithreducedpopulationgrowth

inequality and growth why differential fertility matters we argue that inequality and growth are linked through differential fertility and the accumulation of human capital we build an overlapping generations model in which dynasties differ in their initial endowment with human capital growth the income distribution and fertility are endogenous due to a quantiy quality tradeoff families with less human capital decide to have more children and invest less in education when initial inequality is high large fertility differentials lower the growth rate of average human capital since poor families who invest little in education make up a large fraction of the population in the next generation a calibrated model shows that this fertility differential effect is quantitatively important we also provide empirical evidence to confirm the links between inequality differential fertility and growth suggested by the model

is flexible labour good for innovation evidence from firm level data whether the use of flexible workers is damaging to innovation or not depends on the dominant innovation regime in a sector in sectors with a routinised innovation regime high shares of low paid temporary workers have a negative impact on the probability that firms invest in r d in sectors that tend towards a garage business regime however flexibility has no impact the two innovation regimes differ in the nature of their knowledge base reliance on generally available knowledge or dependence on a firm s historically accumulated knowledge base innovation in the latter regime benefits from longer job durations our results are consistent with findings in macro level studies that coordinated market economies with rigid labour markets have higher labour productivity gains than liberalised market economies

why does child labor persist with declining poverty we develop a dynamic overlapping generations model to highlight the role of income inequality in explaining the persistence of child labor under declining poverty differential investment in two forms of human capital schooling and health in the presence of inequality gives rise to a nonconvergent income distribution in the steady state characterized by multiple steady states of relative income with varying levels of education health and child labor the child labor trap thus generated is shown to preserve itself despite rising per capita income policy recommendations include public provision of education targeted toward reducing schooling costs for the poor or raising the efficacy of public health infrastructure jel i1 j2 o1 o2

human resource management and performance in european firms we develop a theoretical framework to examine three hypotheses on the relationship between human resource management hrm practices and organisational performance in european firms the first is that collaborative forms of hrm practice are more strongly associated with superior firm performance than calculative forms the second is that these associations are strongest where national institutional and normative settings support them the third is that employer employee consultative committees and collective payment methods are also associated with superior firm performance the first two propositions are strongly empirically supported as is the third albeit more weakly the implications of the findings for european policy and varieties of capitalism theory are discussed

when labour market rigidities are useful for innovation evidence from german iab firm level data abstract supply side economists made numerous pleas for removing labour market rigidities through structural reforms from a schumpeterian viewpoint however one can argue that labour market rigidities create useful incentives for innovation our estimates on german panel data 2007 2015 support the schumpeterian view using the taxonomy of industries by peneder 2010 we find that evidence of the schumpeterian view is particularly strong in r d intensive manufacturing industries as well as in service industries with high degrees of cumulativeness of knowledge evidence of the schumpeterian view is weaker in low technology industries and in start ups when firms rely more on generally available knowledge rather than on firm specific and tacit knowledge accumulated in the past

optimal regime switching and threshold effects we consider a general control problem with two types of optimal regime switch the first one concerns technological and or institutional regimes indexed by a finite number of discrete parameter values and the second features regimes relying on given threshold values for given state variables we propose a general optimal control framework allowing to derive the first order optimality conditions and in particular to characterize the geometry of the shadow prices at optimal switching times if any we apply this new optimal control material to address the problem of the optimal management of natural resources under ecological irreversibility and with the possibility to switch to a backstop technology

agglomeration backward and forward linkages evidence from south korean investment in china abstract with a firm level data set we study the location decision of south korean multinationals across china s regions our conditional logit estimates confirm agglomeration effects along industry and along national lines we add an upstream and downstream backward and forward linkage effect we find that the presence of upstream and downstream south korean affiliates significantly increases the likelihood that a south korean multinational invests in a particular region however linkages that do not differentiate by nationality do not seem to matter much as such our analysis of investors location choice brings together two perspectives linkages and agglomeration along national lines

complements versus substitutes and trends in fertility choice in dynastic models demographers emphasize decreased mortality and economic development as the main contributors generating the demographic transition contrary to previous findings we show that simple dynastic models a la barro becker can reproduce observed changes in fertility in response to decreased mortality and increased productivity growth if the intertemporal elasticity of substitution is low enough we show that this is largely due to number and welfare of children being substitutes in the utility of parents in this case we find that with an ies of one third model predictions of changes in fertility amount to two thirds of those observed in u s data since 1800 between 1800 and 2000 fertility choice in the united states underwent a dramatic transition depending on estimates it fell from about six children per woman to around two children per woman this demographic transition from a state of high fertility and high mortality to low fertility and low mortality has been documented by demographers and historians in the united states and in every other developed country in the world over this same period natural rates of population growth net of immigration also fell but less substantially demographers have not reached a consensus on the root causes of this transformation but list several changes as likely main contributors these include reductions in infant and child mortality rates imrs and cmrs and the process of industrialization and economic development the work in demography and history on this topic has largely been limited to empirical studies with almost no choice based modeling of the type seen in economics even there issues of the timing of changes