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Economic growth is no panacea for child labour, research suggests – University of Reading

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Economic growth is no panacea for child labour, research suggests

Release Date 24 April 2006

Child labour causes suffering to millions of children around the globe, and many policy makers argue that economic growth is the best panacea. But researchers at the University of Reading are now arguing that economic growth can lead to increasing child labour participation. Dr Uma Kambhampati and Raji Rajan, writing in the journal World Development, suggest that the initial impact of economic growth can be an increasing demand for child labour. It is only when economic growth is sustained over a considerable period of time that the incidence of child labour begins to decrease. The Reading academics came to their conclusions by studying data taken from the National Sample Survey of India, which covers 15 of the country's major states, each with varied economic performances and socio-cultural environments. They analysed the relationship between the rate of growth of an economy and the extent of child labour that exists within it. "Our results lead us to conclude that contrary to popular wisdom, growth actually increases rather than decreases child labour in the short run because it increases the demand for child workers," said Dr Kambhampati, a Senior Lecturer in Economics at the University's Business School. "When an economy first begins to grow, demand for the labour of both adults and children begins to rise. Initially, the jobs that become available, especially in the rural sector, will be low-skilled jobs which can be undertaken by children. In a context where households are poor and household members therefore are actually working less than they may optimally wish to, growth may actually increase employment. "Eventually, however, as the economy continues to grow, the supply of low-skilled jobs dries up and sustained growth will result in an increase in higher-skilled jobs both in the agricultural and industrial sectors. This, in turn, will increase the demand for schooling and decrease child employment. "So we can see that economic growth actually has an inverted U-shaped relationship with child labour. There is an initial increase in child work, followed by a decrease in the longer run. In this context, the pertinent question, of course, is the income level at which growth actually begins to decrease child labour." 'Economic Growth: A Panacea for Child Labour?', by Dr Uma Kambhampati and Raji Rajan, appears in World Development Vol. 34, No. 3 (March). The work was funded by the Department for International Development (DfID). End Media contacts: Dr Uma Kambhampati, Senior Lecturer, Department of Economics, The University of Reading Tel: +44 (0)118 378 5248 Email: u.s.kambhampati@rdg.ac.uk Craig Hillsley, Press Officer, The University of Reading Tel: +44 (0)118 378 7388 Email: c.hillsley@rdg.ac.uk

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