International Migration and Child labour in Developing Countries

• Date: 01 April 2017
• DOI: http://doi.org/10.1111/twec.12375
• Author: Mariapia Mendola,Anna De Paoli
• Published date: 01 April 2017

International Migration and Child labour

in Developing Countries

Anna De Paoli and Mariapia Mendola

University of Milano Bicocca, Milan, Italy

1. INTRODUCTION

INTERNATIONAL migration, mainly from poor to rich countries, has risen steadily over

the last three decades and by the 2000s some developing regions have lost a substantial

fraction of their population to emigration. Remarkably, the shares of the labor force leaving

many individual source countries is much higher than the proportionate changes in the labor

force in many destination countries due to immigration.

1

The sheer scale of the cross-border

movement of workers has recently raised much interest in its economic impact on the labor

market in source countries. This is so as emigration changes a country’s supply of labor and

skill mix, and these effects may have significant consequences for a sending country’s struc-

ture of wages. Indeed, there is a growing body of studies that document the positive impact

of emigration on wages of non-migrating workers in the home country (e.g. Mishra, 2007

on Mexico; Borjas, 2008 on Puerto Rico; Bouton et al., 2011 on Moldova; Gagnon, 2011 on

Honduras; Dustmann et al., 2012 on Poland). While the focus is mainly on the adult labor

force, the improved labor maket conditions due to emigration may also affect child labor sup-

ply in migrant-sending regions (Edmonds, 2008a, 2008b). This is so as child work is ulti-

mately a parental decision driven by stark poverty such that higher parental wages may shift

children’s time allocation (Basu and Van, 1998). Yet, little evidence exists in the literature on

the labor market effect of emigration on children in home developing regions.

This paper addresses this issue by empirically analysing the relationship between interna-

tional labor outflows and child time allocation in a wide range of developing countries. We

exploit both within- and cross-country variation in the emigration supply shock across

heterogenous groups of workers in migrant-sending countries and our results are consistent

with standard trade and labor-economics theory of migration.

According to the International Labour Organization (ILO) child labor is still a gigantic and

persistent phenomenon in many developing countries. A global picture shows that in 2 012

approximately 144.1 million children between 5 and 14 years were at work, 45 per cent of

whom are in Asia, 40 per cent in Africa, and 6 per cent in Latin America (ILO 2010).

2

We thank Fr

ed

eric Docquier, Marco Manacorda, Anna Maria Mayda, Michele Pellizzari and seminar

participants at the 5th Migration and Development Conference in Paris, the 2012 CSAE Conference in

Oxford, the 11th Journ

ees LAGV in Marseille, DIW Berlin, Bocconi University and University of Flor-

ence for useful comments and suggestions. We are grateful to Juan Miguel Gallego for valuable inputs

at an early stage of the project. Financial support from Centro Studi Luca d’Agliano (LdA) is gratefully

aknowledged. Usual disclaimer applies.

1

To cite a few examples, emigrants account for more than 10 per cent of the population of Mexico or El

Salvador, and as much as 20 to 30 per cent in smaller countries such as Albania, Jamaica or Trinidad and

Tobago.

2

ILO figures are based on a definition of child labor that includes any kind of activity with the

exception of domestic work, as information on the latter is not available for many countries.

©2016 John Wiley & Sons Ltd

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The World Economy (2017)

doi: 10.1111/twec.12375

The World Economy

Several explanations of the phenomenon have been provided, including the influence of local

labor markets, the need for extra household income to achieve minimum consumption, credit

constraints combined with poverty and intra-household agency (see Edmonds, 2008a, 2008b

for a detailed and comprehensive review of the literature). More recently, some observers

have highlighted the role of globalisation and market integration in shaping child time alloca-

tion in developing countries through their impact on the labor market (Dinopoulos and Zhao,

2007; Edmonds and Pavcnik, 2005a and Epstein and Kahana, 2008). Yet, while there is some

evidence of the little or no harm of international trade on child work in low-income contries

(Cigno et al., 2002; Edmonds and Pavcnik, 2006), the labor market impact of global migra-

tion flows on children in countries of origin has received less empirical attention.

According to the theory, the correlation between child labor and international emigration

may be at work through changes in the local labor market which generate both income and sub-

stitution effects working in opposite directions. To the extent that labor migration outflows

induce higher wages for adults, and leisure (non-work) is a normal good, children’s labor mar-

ket participation will fall (Basu and Van, 1998). On the other hand, if emigration is also assoc i-

ated to a rise in child wages, this will lead to an increase in children’s labor suppl y (Cigno and

Rosati, 2005; Edmonds and Pavcnik, 2005a; Manacorda and Rosati, 2010). These competing

effects, though, are likely to be differentiated according to the characteristics of the migrant

labor force with respect to stayers, as well as to household and individual-level attributes.

Indeed, standard trade and labor-economics theories of factor markets, such as the Heckscher-

Ohlin model and the factor-proportions-analysis model, predict that individual labor supply

depends on the impact on factor prices of changes in relative factor supplies due to emigration

(Borjas, 1995). In particular, assuming heterogenous labor and perfectly elastic capital, the labor

market impact of emigration depends entirely on the relative skills of emigrants with respect to

stayers (the concept is analogous to the one formalised in the context of immigration; see Bor-

jas, 1999). Thus, since children typically compete in the low-skilled labor market , the substitu-

tion effect will be at work if emigration is relatively low-skilled with respect to non-migrant

workers. At the same time, given that a child’s labor supply decision is ultimately taken by the

parent(s) in a unitary household framework, the improved labor market conditions faced by

households endowed with unskilled labor can still raise family incomes in a way that tends to

reduce child labor. It follows that the interaction between parental skill type and each country’s

relative skill endowment plays a key role in determining the income distribution effects of emi-

gration on children.

We investigate this issue by generating an original dataset which combines information on

the skill composition of migrants in each sending country with detailed individual and house-

hold-level survey data on child labor (MICS II-UNICEF, 2000; Docquier et al., 2007). Hence,

our analysis is based on a large cross-country survey dataset on more than 300,000 children

aged 5–14 from 38 developing countries. The combination of detailed survey data on child

labor with information on international migration outflows by skill allows us to test for inter-

active effects between parental skill level and emigration-induced changes in the local labor

market. As the closest empirical counterpart of the latter, we use the skill composition of emi-

grant relative to non-migrating natives in the source country to directly measure the labor

market competition effect induced by emigration (see Mayda, 2006).

Overall, we find that children of low-educated parents are more likely to be at work. Yet,

in countries with relative lower (higher) skill composition of emigrants, low-skilled resident

parents are significantly less (more) likely to send their children to work. These results point

to a significant role of international migration in shaping child time allocation in countries of

©2016 John Wiley & Sons Ltd

MIGRATION AND CHILD LABOUR 679