Abstract
Parsons and Goldin (in Econ Inq 637–659, 1989) use the US Commissioner of Labor Survey of (1890) to argue that many American parents sacrificed the future earnings of their children by sending them to work rather than to school. We analyze the same data and argue that parental choices were dictated by constraints rather than the desire to exploit child labor opportunities. We also find significant income effects on child labor supply, indicating that affluence played an important part in the decline of child labor. The coexistence of positive assets with child labor is not inconsistent with parental altruism, indicating instead a failure of perfect two-sided altruism.
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Notes
Goldin and Sokoloff (1982) show that in the first half of the nineteenth century, child work was widespread in agriculture and artisanal production. Within manufacturing industry, cotton and woollen textiles were the main users of child labor. Children constituted 50% of the workforce in cotton textiles, and 41% of the workforce in woolen textiles (among firms employing 16 or more workers).
It is straightforward to generalize these arguments to families with several children or adults.
For example, Goldin and Katz (2008) use the 1915 Iowa census and find that the rates of return to education for men were between 10 and 12%.
Note that PG assume that there is no other source of compensating differentials, apart from child labor opportunities. To the extent that jobs varied in other non-pecuniary characteristics, such as working conditions, the estimated coefficient would also capture this term.
Twenty five percent of the children of unskilled workers in woolen textiles were employed.
As we have noted before, there could be other sources of compensating differentials, such as unpleasant working conditions. These seem plausibly to be less important than skill barriers to entry, given the magnitude of the wage gains from re-employment in high-wage industries.
Their estimates of employment probability by age and sex are obtained by regressing the number of children working upon age and gender composition of the family.
The efficiency wage model has the same qualitative empirical predictions—for industries where child labor can be employed, the required efficiency wage would be lower for families with boys as compared to families with girls, and thus, the former would be employed preferentially, thereby biasing sex ratios across locations.
We are grateful to an anonymous referee for bringing this evidence to our attention.
However, Ray (2000) analyses data from Pakistan and Peru and finds mixed results, with weak income effects in Pakistan.
This is consistent with the evidence—in 1850, the median age at which children left home was 22.5 for males and 20.5 for females (see Whaples 2005).
Although the coefficients are somewhat different in the two specifications, this difference is offset by the difference in the proportion of uncensored observations. As a result, the marginal effect is 0.086 in the first specification and 0.088 in the second.
Following Baland and Robinson, this assumes that the child’s consumption is fixed and does not depend upon the child labor decision. Moehling (2005) presents evidence showing that the consumption of children rose with their labor force participation.
Indeed, if parents are altruistic, then the public provision of old-age insurance or pensions would be sufficient to induce efficient child labor decisions.
For girls, the own-wage elasticity is not significantly different from zero.
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Acknowledgments
We are very grateful to Michael Haines for providing us with the data used in the paper, and to Marco Francesconi, Carolyn Moehling, an anonymous referee, and various seminar participants for their comments and suggestions.
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Bhaskar, V., Gupta, B. Parental altruism and child labor: examining the historical evidence from the United States. Cliometrica 6, 249–266 (2012). https://doi.org/10.1007/s11698-012-0077-8
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DOI: https://doi.org/10.1007/s11698-012-0077-8