The main law regulating child labor in the United States is the Fair Labor Standards Act. For non-agricultural jobs, children under 14 may not be employed, children between 14 and 16 may be employed in allowed occupations during limited hours, and children between 16 and 18 may be employed for unlimited hours in non-hazardous occupations.[1] A number of exceptions to these rules exist, such as for employment by parents, newspaper delivery, and child actors.[1] The regulations for agricultural employment are generally less strict.
The economics of child work involves supply and demand relationships on at least three levels: the supply and demand of labor on the national (and international) level; the supply and demand of labor at the level of the firm or enterprise; the supply and demand for labor (and other functions) in the family. But a complete picture of the economics of child labor cannot be limited to simply determining supply and demand functions, because the political economy of child labor varies significantly from what a simple formal model might predict. Suppose a country could effectively outlaw child labor. Three consequences would follow: (1) the families (and the economy) would lose the income generated by their children; (2) the supply of labor would fall, driving up wages for adult workers; and (3) the opportunity cost of a child’s working time would shrink, making staying in school (assuming schools were available) much more attractive. In principle, a virtuous circle would follow: with more schooling, the children would get more skills and become more productive adults, raising wages and family welfare.20 To the extent that the demand for labor is elastic, however, the increase in wages implies that the total number of jobs would fall.
The labor supply effects are the basic outline of the logic that underlies almost all nations’ laws against child labor, as well as the international minimum age standard set in ILO Convention 138 and much of the anti-child labor statements during the recent protests against the World Trade Organization, World Bank and International Monetary Fund. This model does describe in very simplified form the long-term history of child work in the economic development of developed economies. But in the short-term, the virtuous circle seldom occurs in real life as quickly as the simple, static model suggests. The reason for the model’s short-term failure is that child work results from a complex interweaving of need, tradition, culture, family dynamics and the availability of alternative activities for children.
History suggests that children tend to work less, and go to school more, as a result of several related economic and social trends. the political economy of a place plays at least as big a part as per capita income in determining the level of child labor there.
