Child Labor and Economic Development: Making It Pay to Go to School

Around the world, millions of children are engaged in child labor. The International Labour Organization (ILO) has estimated that up to 1 in 5 children globally are working, with the proportion even higher in some regions of Africa and Asia. Recent estimates of the overall numbers involved range from 158 to 246 million, although the true scale is unknown. Studies have revealed that the majority of child workers, around 70% according to recent World Bank research, are employed in agriculture, followed by services and then manufacturing.

The involvement of children in employment per se is not necessarily a problem. As an ILO report observes, many children combine part-time jobs with their education and gain valuable skills or make a useful contribution to family income in the process. For many others, however, child labor means being exploited by unscrupulous employers, exposed to harmful or dangerous conditions or, at the very least, missing out on an adequate education. The ILO has estimated that in 2000, 171 million workers aged between 5 and 17 were involved in work that was “hazardous to their safety, physical or mental health, and moral development,” and that 8.4 million were employed in the most serious forms of child labor, for example as prostitutes, child soldiers and bonded labor.

The United Nations’ Convention on the Rights of the Child requires governments to protect those aged under 18 from economic exploitation, from performing any hazardous work or any work likely to interfere with a child’s education. However, child labor is an intractable problem that is difficult to eradicate due to its perceived economic benefits at the family and household level. In low-income countries or communities, children are often sent out to work when the expected economic benefits to their family are higher than the perceived economic rewards of education, or when schooling their children is unaffordable for the parents.

Child Labor and Poverty

The links between child labor and poverty have been clearly demonstrated in many studies; there is evidence of a consistent negative association between the extent of child labor in a country and its GDP. The problem of child labor is not confined to the developing world, however. Although the vast majority of working children can be found in Africa and Asia, followed by Latin America, developed countries such as the U.S. also have significant numbers of child laborers, particularly among immigrant communities engaged in agriculture, where extra hands mean extra income. Moreover, countries with similar levels of GDP have differing levels of child labor, suggesting that other factors such as cultural traditions or attitudes and the availability of affordable education also play a role in determining the relative importance of child labor within their economies.

Child labor has an adverse affect on the development of human capital through education and skills development and is therefore likely to hamper economic development in the countries or communities concerned, as well as severely damaging the future prospects of the child workers for escaping poverty. There is a strong positive relationship between the proportion of children working in a country and the proportion not attending school, while not surprisingly, children who do attend school but also work long hours outside the home tend to perform poorly in academic examinations, according to World Bank research.

There is little consensus about the most effective policy options for reducing the prevalence of child labor. It is sometimes suggested that trade sanctions should be applied against countries with particularly high numbers of children working, but UNICEF argue this would make little difference since the majority of child laborers are employed in agriculture and relatively few in export sectors.

The preferred option of the ILO is for the introduction by national governments of “income transfer programs,” like those already in use in India, Mexico and Brazil, which offer financial benefits to low-income families whose children leave paid employment in order to attend school. At the same time, there is a need for adequate investment in the educational sector with the aim of making affordable, high quality education available to all. According to ILO research published in 2004, the long-term benefits of such policies for the countries concerned are likely to be significant; it was estimated that although the overall cost of eliminating child labor would be in the region of US$760 billion, the resultant benefits resulting from improved health and education, concentrated in the developing world, would be around US$ 5.1 trillion.


Duran, M.P. (2004). Investing in every child: An economic study of the costs and benefits of eliminating child labor. ILO: Geneva.

Fares, J. & Raju, D. (2007). Child labor across the developing world: Patterns and correlations. World Bank Policy Research Working Paper 4119, February 2007. Available from,,contentMDK:20254527~menuPK:965612~pagePK:148956~piPK:216618~theSitePK:390553,00.html.

International Labour Organization (1998). Child Labor: Targeting the Intolerable. ILO: Geneva.

International Labour Organization (2002). Every child counts: new global estimates on child labour. ILO: Geneva. Available from

UNICEF (1997). The State of the World’s Children 1997 – Child labour. Available from

US Department of Labor (1998). By The Sweat and Toil of Children, Vol. VI: An Economic Consideration of Child Labor.

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