Question
International Trade and Child LaborAccording to the economist Jagdish Bhagwati, inter- national trade increases the wage for child labor in developing countries. He then claims
International Trade and Child LaborAccording to the economist Jagdish Bhagwati, inter- national trade increases the wage for child labor in developing countries. He then claims that international trade might lead to more child labor in developing countries if parents are "bad" (similarly to less child labor if parents are "good"). The government in some developing countries with high child labor rates pays a family a fixed amount if they send their child to school instead of work. Discuss the issue of child labor and international trade. Specifically, use the labor-leisure model for analysis, and explain what distinguishes "good" parents from "bad" parents? Further- more, how does the government policy affect the choices of good and bad parents, respectively? (Hint: Put the child's leisure time on thex-axis, and household consumption (everything else) on theyaxis and assume that the household have some positive fixed weekly income even when their children do not work.)
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