Guaranteed manufactured without child labor

The economics of consumer boycotts, social labeling and trade sanctions

authored by
Arnab K. Basu, Nancy H. Chau, Ulrike Grote
Abstract

Does labeling products "Child-Labor Free" provide a market-based solution to the pervasive employment of child labor? This paper explores the promise of social labeling in the context of its four oft-noted objectives: child labor employment, consumer information, welfare, and trade linkages, when competition between the North and South is based both on comparative cost advantage, and the use of child labor as a hidden product attribute. We show that (i) social labeling benefits consumers and Southern producers, whereas children and Northern producers are worse off; (ii) trade sanctions on unlabeled products deteriorates Southern terms of trade, but leaves the incidence of child labor strictly unaffected; and (iii) a threat to sanction imports of unlabeled Southern products discourages the South from maintaining a credible social labeling program. We also explore the question of whether social labeling should be viewed as a transitory or a permanent institution in developing economies.

External Organisation(s)
College of William and Mary
Cornell University
University of Bonn
Type
Article
Journal
Review of development economics
Volume
10
Pages
466-491
No. of pages
26
ISSN
1363-6669
Publication date
25.07.2006
Publication status
Published
Peer reviewed
Yes
ASJC Scopus subject areas
Geography, Planning and Development, Development
Sustainable Development Goals
SDG 1 - No Poverty, SDG 8 - Decent Work and Economic Growth
Electronic version(s)
https://doi.org/10.1111/j.1467-9361.2006.00335.x (Access: Closed)