The trade effects of information provision about forced and child labor

Abstract

The issue of child and forced labor employed in the production of goods has been at a forefront of public debate in recent decades with millions of victims and nearly all countries being affected. This paper examines whether information about the use of child and forced labor in the production of goods affects their imports to the United States. I investigate this question using the largest naming and shaming strategy ever implemented world-wide: inclusion on the U.S. government’s list of goods produced with child or forced labor. This list aims to provide impartial information to consumers and firms about a broad range of goods, in contrast to previously used measures in the literature which have tended to be more emotionally driven boycotts or labelling campaigns of specific goods. The paper finds that such information provision decreased United States imports of goods believed to be made using child and forced labor. The results are mainly driven by goods closer to the point of consumption, where consumers might reasonably be expected to penalize products that are thought to rely on such labor, while no effect was found for intermediate goods. Thus, public information strategies may be efficient policy instruments in disincentivizing the purchase of certain goods believed to be made with child and forced labor.