American Economic Review: Vol. 95 No. 5 (December 2005)
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The Macroeconomics of Child Labor Regulation
Doepke, Matthias, and Fabrizio Zilibotti. 2005. "The Macroeconomics of Child Labor Regulation." American Economic Review, 95(5): 1492-1524.
We develop a positive theory of the adoption of child labor laws. Workers who compete with children in the labor market support a child labor ban, unless their own working children provide a large fraction of family income. Fertility decisions lock agents into specific political preferences, and multiple steady states can arise. The introduction of child labor laws can be triggered by skill-biased technological change, which induces parents to choose smaller families. The theory can account for the observation that, in Britain, regulations were first introduced after a period of rising wage inequality, and coincided with rapid fertility decline.
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