TY - JOUR

T1 - Guaranteed manufactured without child labor

T2 - The economics of consumer boycotts, social labeling and trade sanctions

AU - Basu, Arnab K.

AU - Chau, Nancy H.

AU - Grote, Ulrike

PY - 2006/7/25

Y1 - 2006/7/25

N2 - 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.

AB - 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.

UR - http://www.scopus.com/inward/record.url?scp=33746448287&partnerID=8YFLogxK

U2 - 10.1111/j.1467-9361.2006.00335.x

DO - 10.1111/j.1467-9361.2006.00335.x

M3 - Article

AN - SCOPUS:33746448287

VL - 10

SP - 466

EP - 491

JO - Review of development economics

JF - Review of development economics

SN - 1363-6669

IS - 3

ER -