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ON THE DISTRIBUTIONAL CONSEQUENCES OF CHILD LABOR LEGISLATION*
Author(s) -
Krueger Dirk,
Donohue Jessica Tjornhom
Publication year - 2005
Publication title -
international economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.658
H-Index - 86
eISSN - 1468-2354
pISSN - 0020-6598
DOI - 10.1111/j.1468-2354.2005.00346.x
Subject(s) - welfare , human capital , labour economics , legislation , economics , distribution (mathematics) , wage , economic interventionism , government (linguistics) , demographic economics , economic growth , linguistics , law , market economy , mathematical analysis , philosophy , mathematics , politics , political science
This article studies the effects of child labor legislation on human capital accumulation and the distribution of wealth and welfare. We calibrate our model to U.S. data circa 1880 and find that the consequences of restricting child labor or providing tax‐financed education depend on the main source of individual household income. Households with significant financial assets unambiguously lose from government intervention, whereas high‐wage workers benefit most from a child labor ban, and low‐wage workers benefit most from free education. Introducing free education results in substantial welfare gains, whereas a child labor ban induces small welfare losses.