Bans and regulations against child labour are among the most popular policy tools used to address the problem throughout the developing world. But how well do they work in practice? This column analyses the effectiveness of India’s flagship legislation against child labour, the Child Labour Act of 1986. It finds that a few years after the ban, employment levels of children under the legal working age of 14 rose relative to those of legal age.
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Taken altogether, our results suggest that households with children 10-13 are worse off after the 1986 Act relative to those with older children – child wages fall, child employment rises, child schooling falls, and household consumption and wealth fall.
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Our findings do not discourage all forms of government-led policies against child labour.1 There are many options available to policymakers who wish to reduce the incidence of child labor such as cash transfers to families and increasing investments in education. If anything, we think a discussion in policy circles about these alternatives should be heightened since it appears from our study that child labour bans of the type instituted under the Child Labor Prohibition and Regulation Act can be ineffective. Recognising that child labour is frequently the last resort of poor households suggests an approach that is focused on reducing the supply of child labour by helping poor households rather than restricting the demand for child labour which we find will lower their incomes and can generate perverse responses.
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