Who Gains from Child Labor? A Politico-Economic Investigation

This paper develops a positive theory of the adoption of child labor restrictions (CLR). The key mechanism in our model is an interaction between parental decisions on family size and their preferences for CLR. While parents with few children have little to gain from child labor and are therefore likely to favor CLR, parents with many working children would be expected to oppose CLR. Fertility decisions, in turn, are affected by existing and expected child-labor policies. If policies are determined by majority voting, the interaction between fertility decisions and political preferences can lead to multiple steady states with different child-labor policies. A switch from no regulation to CLR is possible if a rising skill premium induces parents to choose smaller families, which over time creates a majority in favor of CLR. Consistent with this explanation, the introduction of CLR in the U.K. followed a period of rising wage inequality, and coincided with rapidly declining fertility and rising education levels. Preliminary and incomplete. We thank Kjetil Storesletten, Torsten Persson, and seminar participants at Université catholique de Louvain, UCLA, and the SEDAnnual Meeting in New York for helpful comments. Doepke: Department of Economics, UCLA, Box 951444, Los Angeles, CA 90095. E-mail address: [email protected]. Zilibotti: IIES, Stockholm University, University of Southhampton and CEPR. E-mail: [email protected].