TITLE:
Child Labour and Import Substitution
AUTHORS:
Bharat Hazari, Vijay Mohan
KEYWORDS:
Child Labour, Import Substitution, Needs-Based Income, Tariffs
JOURNAL NAME:
Theoretical Economics Letters,
Vol.15 No.2,
April
7,
2025
ABSTRACT: This paper examines the impact of import substitution motivated tariffs on child labour and welfare in a small open economy. Using a simple diagrammatic analysis of a two-sector general equilibrium model where parents send children to work when household income falls below a certain needs-based threshold, the model finds that tariffs can raise welfare under some circumstances, even in a small economy, though this welfare increase comes at the expense of greater child labour. Overall, the paper emphasizes the dangers of an import substitution policy in an economy where child labour is prevalent.