The Child labour-GDP per capita relationship: is there something beyond it ?

The paper tests the theoretical predictions of a simplified intra-household bargaining model which, under reasonable assumptions, shows that child labour is significantly related to parental income, quality of education, international aid, trade liberalization, share of export of primary products and the competitiveness of the labour market. Cross-sectional and panel negative binomial estimates in a sample of emerging countries show that selected proxies of the above mentioned variables are significantly related to child labour. The positive impact of the share of primary product export on child labour outlines the existence of a potential paradox. The paradox suggests that trade liberalisation has not always straightforward positive effects on social indicators and that its short run effects on income distribution and distribution of skills and market power across countries need to be carefully evaluated.