Now, let's consider the economics of child labor.
Estimates vary and, in any case, they're very rough.
But it's possible that over 200 million children in the world are working today.
Some good news is that rates of child labor are falling over time,
as you can see in this picture,
with the lines representing the different major regions of the world.
And the falls are substantial.
If we look at the line, for instance, for Africa,
at about 1950 the rate of child labor in Africa was almost 40 %.
But as of 2010, we can see that it's somewhat below 25 %.
This picture very much shows that rates of child labor
are declining with wealth.
That is, once parents have enough money and they are sure the family is able to eat,
they don't really want to send their children to work.
This is one of the many good things about being a wealthier society.
Here's evidence from Vietnam showing again
that child labor tends to decline with wealth.
From 1993 to 1997, Vietnam grew at a rate of about 6 to 7 %.
Over that same period, child labor went down by about 28 %.
What else do we know about child labor.
Some of these may be a little surprising.
First, most children that work are employed by their parents.
Second, most of these children work in agriculture.
Third, most children that work actually also attend school,
although by no means do they all.
And finally, child labor is highly responsive to negative income shocks,
that is, if you have a very poor family and something very bad happens to them
such as a bad harvest,
then they may send the children out to work.
One argument is that the best way out of child labor
is simply for a society to become wealthier
and then the children will not be sent so much to work.
But there's another point of view which suggests that, in the meantime,
the law can bring about an improvement.
Let's think about how this argument might work.
In one version of this view, in the labor market,
there are multiple equilibria,
one of them is here and another of them is here.
And to think about what that might mean intuitively,
here's how that goes.
Imagine that you passed a law banning child labor,
that would limit the number of individuals in the workforce,
it might raise wages somewhat,
and perhaps if all of the children cease working
family wages will be higher
and it won't be necessary to send the children out to work.
But for this to be successful
perhaps you have to ban child labor across the board.
We don't know if this argument is true,
but it is an argument that has been made for banning child labor outright
and not simply waiting for societies to become wealthier.
Another argument for banning child labor outright is called
the child labor trap,
and that goes this way:
The claim is it's not efficient to send children out to work,
ideally it would make more sense to educate the child
and then have the child pay parents back overtime with later earnings.
But maybe that kind of arrangement cannot be enforced
unless the parents get what they can out of the child
which is to make the child work now.
That means when the child grows up,
the child, then as a parent, is not educated
and is much poorer
and that individual will in turn send his or her children out to work,
and you're stuck in a series of generations
where each generation sends the children out to work.
But if you could somehow snap this spring by banning child labor
and the children then get more educated,
well, it could be the case that the whole series of generations would be better off.
For this argument to be true of course,
you probably do need a fairly good educational opportunity for those children.
Other economists have argued that laws against child labor
actually can be counterproductive and might even lead to more child labor.
Here's a way to think about it.
If you pass a law banning child labor,
that means employers of child labor take on more risk.
But as we see in the real world, very often the practice still continues.
But what happens is that the children who are working,
they are now paid lower wages because hiring them involves greater risk.
Those children are paid lower wages,
the families are then poorer, they have lower income,
and they're at the verge of subsistence.
So how do they respond?
They respond by actually increasing the labor supply of the other children
and sending even more children out to work
because they need to do so to continue to eat.
Of these three different mechanisms I've outlined,
I would stress that we don't yet know how true each one of them may be.
There are many interesting papers on child labor,
but note that data in this area, good data,
they're really quite hard to come by.
But you can read all of these online
and note also the first one listed by Basu is the source of the first figure in this video.
An excellent survey piece is this one listed here, also online,
and note it's the source for our second and third figures in this video.
Child labor is an important issue.
It's very important to think analytically about it
and not just emotionally,
but it's also very hard to do.
Nonetheless, this is an introduction to some of the leading issues.