NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Leah Lakdawala

Department of Economics
Michigan State University
486 W. Circle Drive
110 Marshall-Adams Hall
East Lansing, MI 48824

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NBER Working Papers and Publications

October 2013Perverse Consequences of Well Intentioned Regulation: Evidence from India's Child Labor Ban
with Prashant Bharadwaj, Nicholas Li: w19602
While bans against child labor are a common policy tool, there is very little empirical evidence validating their effectiveness. In this paper, we examine the consequences of India's landmark legislation against child labor, the Child Labor (Prohibition and Regulation) Act of 1986. Using data from employment surveys conducted before and after the ban, and using age restrictions that determined who the ban applied to, we show that child wages decrease and child labor increases after the ban. These results are consistent with a theoretical model building on the seminal work of Basu and Van (1998) and Basu (2005), where families use child labor to reach subsistence constraints and where child wages decrease in response to bans, leading poor families to utilize more child labor. The increase i...
 
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