Segmentation in the market for child labor: The economics of child labor revisited

Recent events have focused attention on international labor standards, with some special attention being paid to child labor. The diverse forms of child labor are often merged into one: a stereotype of "children sewing Nikes," although the situation varies widely from that model. Certain forms of child labor are not substitutable by adult labor; others are more appropriately modeled as a form of apprenticeship. A simple family utility function helps elucidate the reasons. The ultimate purpose of the paper is to challenge the policy ambiguity-we cannot tell whether restrictions on child labor are good or bad-that was a result in Basu and Van's earlier (1998) modeling of child labor.