It’s a Hard-Knock Life: Child Labor Practices and Compliance with IMF Agreements

Brendan Skip Mark,Tiffani Crippin,Andrew Foote,Huei-Jyun Ye

doi:10.3390/socsci10050171

Brendan Skip Mark, Tiffani Crippin + Show 2 more

Open Access

https://doi.org/10.3390/socsci10050171

Copy DOI

Abstract

How does IMF lending impact child labor? We argue that, as compliance with IMF reforms increases, child labor increases. IMF loans can help governments avoid bankruptcy, prevent debt defaults, and credibly signal a commitment to pro-market reforms which should generate trade and investment. However, IMF policies associated with revenue and social policies can have negative impacts on child labor. Education reforms undermine the quality of schooling, making child labor more likely. Healthcare reforms undermine the quality of healthcare; when parents are ill or injured, their children are more likely to enter the workforce to make up for lost income. Similarly, social safety net reforms reduce the ability of families to access a safety net during times of hardship and make it more likely that children are pushed into the labor market to keep families afloat. To test our argument, we use a control function selection model on a sample of 70 IMF borrowers between 2002 and 2016. Using new datasets on IMF compliance and child labor, we find that increased compliance with IMF reforms worsens child labor practices. Revenue and social policy compliance in particular are associated with an increase in child labor.

Highlights

The International Labor Organization (ILO) estimates that around 152 million children worldwide are involved in child labor and 70 million work in hazardous conditions (International Labor Organization 2017, p. 23)
We focus on the effect of compliance with IMF reform on child labor practices
We argue that the effects of IMF reforms will increase the incidence of child labor, as a weakened state will find it difficult to monitor child labor practices in the private sector

Summary

Introduction

The International Labor Organization (ILO) estimates that around 152 million children worldwide are involved in child labor and 70 million work in hazardous conditions (International Labor Organization 2017, p. 23). The focus of these reforms may have the unintended consequence of increasing child labor: as spending cuts and social welfare policy reforms push families further into poverty, more children must enter the labor force to help their families make ends meet. IMF economic reforms are designed to shift power away from the government and toward market actors in order to address the structural problems in a country that undermine economic growth and development (Abouharb and Cingranelli 2007; Blanton et al 2015; Vreeland 2002) These reforms contain a broad set of economic policies aimed at reducing government spending, privatizing state-owned enterprises, removing barriers to trade and capital mobility, and increasing labor market flexibility (Stiglitz 2002). The literature tying IMF reform to increased violations of labor rights is large, yet the impact of IMF reform on child labor has been largely neglected (Abouharb and Cingranelli 2007; Blanton et al 2015; Detraz and Peksen 2016; Martin and Brady 2007; Nooruddin and Vreeland 2010; Vreeland 2002)

IMF Reform and Child Labor

Research Design

Outcome Variable

Covariates of Child Labor

Methodological Approach

Results