The paper attempts to identify the different channels through which economic reforms can affect the incidence of child labour in a developing economy using a three-sector general equilibrium framework with child labour. We show that reduction in poverty is not a necessary condition for the problem of child labour to improve in the developing economies. Economic reforms like an inflow of foreign capital can mitigate the incidence of child labour by raising the return to education and lowering the earning opportunities of children. © 2009 Elsevier Inc. All rights reserved.

SARBAJIT CHOWDHURY

Economics

J K DWIBEDI

Fulltext

University of Calcutta (informally known as Calcutta University or CU) is a collegiate public state university located in Kolkata, West Bengal, India.&nbsp;Within India it is recognized as a &quot;Five-Star University&quot; and accredited &quot;A&quot; Grade by National Assessment and Accreditation Council.

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The University of Calcutta has secured the Fifth position among the Universities of India in the prestigious &quot;Indian University Ranking 2019&quot; list, released by the NIRF of the Ministry of Human Resource Development, Government of India.

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It was established on 24 January 1857, and was one of the first institutions in Asia to be established as a multidisciplinary and Western-style university. Its alumni and faculty include several heads of state, heads of government, social reformers, prominent artists, only academy award winner and Dirac medal winner in India, many Fellows of the Royal Society and five Nobel laureates as of 2019 which is highest in South Asia.

University Of Calcutta

International Review of Economics and Finance

The present paper develops a two-sector, specific factor general equilibrium framework for analyzing endogenous skill formation in a dynamic set-up and examining the consequence of a public subsidy policy on education on the skilled-unskilled wage inequality in a small open economy. It shows that given the technologies of production the policy produces a favorable impact on the wage inequality only in one of the two periods while producing an adverse consequence in the other. If the wage income inequality improves (deteriorates) in period 1 it worsens (ameliorates) in period 2 under the same sufficient conditions. The results are found to be more or less valid even in the presence of unemployment of unskilled labour. Finally, some composite policy recommendations have been suggested so that the relative wages always move in favor of the poorer section of the working population. © 2017 Elsevier Inc.

Can public subsidy on education necessarily improve wage inequality?

The paper develops a three-sector full-employment general equilibrium model for a small open developing economy with exogenous labour market imperfection and a non-traded sector providing healthcare services, the consumption of which generates positive externalities. Our main objective is to show that the optimal consumption subsidy to healthcare, if solely judged from the standpoint of economic growth, is strictly positive (zero) when the production technology of the healthcare sector is of the variable (fixed) coefficient type. However, in the variable coefficient case, the optimal per capita expenditure on healthcare crucially hinges on the degree of labour market imperfection and the quality of services provided by the healthcare sector. The latter result can possibly be considered as a theoretical justification why the magnitude of per capita public spending on healthcare services is significantly lower in the developing countries compared to that in the developed nations. Besides, using the Sen's (1974) index of social welfare that takes into consideration both the growth and income inequality aspects, we have proved that the optimal health subsidy is positive irrespective of the nature of production technology of the healthcare sector. Furthermore, most of these results are found to be valid even in the presence of Harris-Todaro type unemployment. Finally, the results lead to a few important policy implications in the context of the developing countries. © 2017 Elsevier Ltd

Economic Modelling

Subsidizing healthcare in the presence of market distortions

Children in poor countries are subjected to exploitation characterized by low wages and long hours of work, as well as by unclean, unhygienic and unsafe working and living conditions, and, more importantly, by deprivation from education, all of which hampers their physical and mental development. Child labour is a complex issue, and clearly it has no simple solution. This book sheds some understanding of its root causes. The book attempts to delve into many of the important theoretical aspects of child labour and suggests policies that could indeed be useful in dealing with the problem under diverse situations using alternative multisector general equilibrium models. © 2017 Sarbajit Chaudhuri and Jayanta Kumar Dwibedi. All rights reserved.

The Economics of Child Labour in the Era of Globalization: Policy issues

The economics of child labour in the era of globalization: Policy issues

In development literature Foreign Direct Investment (FDI) is traditionally considered to be instrumental for the economic growth of all countries, particularly the developing ones. It acts as a panacea for breaking out of the vicious circle of low savings/low income and facilitates the import of capital goods and advanced technical knowhow. This book delves into the complex interaction of FDI with diverse factors. While FDI affects the efficiency of domestic producers through technological diffusion and spill-over effects, it also impinges on the labor market, affecting unemployment levels, human capital formation, wages (and wage inequality) and poverty; furthermore, it has important implications for socio-economic issues such as child labor, agricultural disputes over Special Economic Zones (SEZ) and environmental pollution. The empirical evidence with regard to most of the effects of FDI is highly mixed and reflects the fact that there are a number of mechanisms involved that interact with each other to produce opposing results. The book highlights the theoretical underpinnings behind the inherent contradictions and shows that the final outcome depends on a number of country-specific factors such as the nature of non-traded goods, factor endowments, technological and institutional factors. Thus, though not exhaustive, the book integrates FDI within most of the existing economic systems in order to define its much-debated role in developing economies. A theoretical analysis of the different facets of FDI as proposed in the book is thus indispensable, especially for the formulation of appropriate policies for foreign capital. © Springer India 2014. All rights are reserved.

Foreign Direct Investment in Developing Countries: A Theoretical Evaluation

Foreign direct investment in developing countries: A theoretical evaluation

The paper develops a three-sector, specific factor, general equilibrium model with two high-skill sectors and unemployment of skilled labor. One of the two high-skill sectors produces a non-traded commodity whose aggregate demand consists of both domestic demand and an exogenously given foreign demand. The consequences of a decline in the foreign demand for the non-traded good resulting from worldwide economic recession on the skilled and unskilled labor markets in a developing economy have been examined. The analysis finds that the effects on the labor markets crucially hinge on the relative factor intensities of the two high-skill sectors and that through the adoption of appropriate fiscal measures; the country can shield its workforce from the rage of global economic downturn. © 2011 Elsevier B.V.

Economic recession, skilled unemployment and welfare

This paper is purported to analyze the consequences of liberalized economic policies on the skilled-unskilled wage inequality in the developing countries using a three sector general equilibrium model reasonable for at least a few developing economies. The analysis of the paper has found that the wage inequality rises unambiguously due to a reduction of import tariff from the low-skill manufacturing sector. However, an inflow of foreign capital produces a favourable effect on the wage inequality under a reasonable factor intensity condition. Interestingly, contrary to the common wisdom, a policy of labour market reform may raise the competitive unskilled wage and improve wage inequality under reasonable condition. © 2006 Elsevier Inc. All rights reserved.

Economic liberalization and wage inequality in the presence of labour market imperfection

The paper develops a three sector general equilibrium structure with diverse trade pattern and imperfection in the unskilled labour market to analyze the consequences of international mobility of skilled and unskilled labour on the skilled-unskilled wage inequality in the developing economies. It shows that the effects of international migration of labour on the wage inequity crucially depend on both the relative capital intensities between the low-skill and high-skill sectors and the institutional nature of the markets for unskilled labour. The analysis finds that an emigration (immigration) of either type of labour is likely to produce a favourable (an unfavourable) effect on the wage inequality. In particular, the result of emigration (immigration) of skilled labour on the relative wage inequality is counterintuitive. These results have important policy implications for an overpopulated developing country like India. © 2006 Elsevier B.V. All rights reserved.

Journal	Data powered by TypesetInternational Review of Economics and Finance
Publisher	Data powered by TypesetELSEVIER SCIENCE BV
ISSN	1059-0560
Open Access	Yes