Child Labour and Import Substitution

Abstract

This paper examines the impact of import substitution motivated tariffs on child labour and welfare in a small open economy. Using a simple diagrammatic analysis of a two-sector general equilibrium model where parents send children to work when household income falls below a certain needs-based threshold, the model finds that tariffs can raise welfare under some circumstances, even in a small economy, though this welfare increase comes at the expense of greater child labour. Overall, the paper emphasizes the dangers of an import substitution policy in an economy where child labour is prevalent.