The economics of child labor.

Child labor, including some of its worst forms in factories, mines and brothels, continues to thrive especially in developing countries. Blanket bans on employing children in export industries can enforce kids into even worse situations, such as starvation. Policymakers need to take a more nuanced approach. Economic theory indicates that child labor can be self-reinforcing. It increases the pool of workers, keeping wages low--and ensuring that families must continue to send their children to work. Yet the abolition of child labor can also be self-reinforcing, by decreasing the labor supply, raising adult wages and eliminating the need for children to work. When these effects operate, selective bans and government assistance to families can help stop exploitation of child labor. The main cause of child labor is parental poverty. Thus, child labor declines with prosperity. In certain situations, a legal ban can be extremely helpful in eliminating child labor while leaving the children and their parents better off. Small incentives, such as providing children with a midday meal in school or giving parents a subsidy for sending their kids to school, can also sharply reduce child labor, as has been shown in Brazil and Bangladesh. INSETS: Easing into the Curve;More Than One Way to Run a Market.