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Globalization, Inequality and Child Labour

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  • 1. Globalization, Inequality, and Child Labour By Amela Karabegovic Research Economist The Fraser Institute
  • 2. Globalization, Inequality, and Child Labour
    • The Fraser Institute
    • Inequality
    • Child Labour
  • 3. The Fraser Institute
    • An independent Canadian economic and social research and educational organization;
    • Offices in Vancouver, Calgary and Toronto;
    • Website: www.fraserinstitute.ca .
  • 4. Globalization and Inequality
    • Poverty refers to the percentage of population living below a certain level of income;
    • Income Inequality refers to the distribution of income.
  • 5. Income Inequality, 1998-2002 Least Free …….. Most Free Percent of income accruing to the Sources: The Fraser Institute; The World Bank, World Development Indicators CD- ROM, 2005.
  • 6. Per Capita Income of Poorest 10% and Economic Freedom Least Free …….. Most Free Sources: The Fraser Institute; The World Bank, World Development Indicators CD-ROM, 2005.
  • 7. Human Poverty Index, 2002, and Economic Freedom Quintile Least Free …………..…. Most Free Sources: The Fraser Institute; United Nations Development Programmme, Human Development Indicators 2004, available at http://hdr.undp.org/statistics/data/index_indicators.cfm (accessed on July 5, 2005).
  • 8. Globalization and Inequality
    • Xavier Sala-i-Martin (2002). The Disturbing “Rise” of Global
    • Income Inequality. NBER Working Paper #W8904. NBER:
    • Cambridge, MA (April).
    • $1/day poverty rate has fallen from 20% to 5% over the last 25 years;
    • $2/day poverty rate has fallen from 44% to 18%;
    • There were about 400 million less poor people in late 1990s than there were in the 1970s.
  • 9. Globalization and Inequality
    • Xavier Sala-i-Martin (2002). The Disturbing “Rise” of Global
    • Income Inequality. NBER Working Paper #W8904. NBER:
    • Cambridge, MA (April).
    • Computed seven different, most popular measure of income inequality;
    • Conclusion: income inequalities have declined substantially during the last two decades;
  • 10. Globalization and Inequality
    • Xavier Sala-i-Martin (2002). The Disturbing “Rise” of Global
    • Income Inequality. NBER Working Paper #W8904. NBER:
    • Cambridge, MA (April).
    • “ [M]ost income inequalities in the world are explained by differences in per capita incomes across countries rather than differences within countries” (p. 39)
    • 70% of world inequalities are across countries inequalities;
    • “ [t]he best strategy to reduce world inequalities is to induce aggregate economic growth in poor countries” (p. 39).
  • 11. Globalization and Inequality
    • Berggren, Niclas (1999). Economic freedom and
    • equality: Friends or foes? Public Choice. Vol. 100,
    • 203-223.
    • “ Increases in economic freedom influence equality measures positively” (p. 217)
    • Trade liberalization and financial deregulation mostly responsible for increases in equality.
  • 12. Globalization and Inequality
    • Dollar, David and Aart Kraay (2004). Trade, Growth, and
    • Poverty. The Economic Journal. Vol. 114 (February), F22-F49.
    • Found no relationship between changes in trade volumes and changes in household income inequality;
    • Globalization leads to faster growth and poverty reduction in poor countries.
  • 13. Globalization and Inequality
    • Litchfield, Julie and Patricia Justino (2004). Welfare in
    • Vietnam During the 1990s: Poverty, inequality and
    • poverty dynamics. Journal of the Asian Pacific Economy.
    • Vol. 9(2), 145-169.
    • Found substantial reductions in poverty in Vietnam during 1990s;
    • Some groups benefited more than others.
  • 14. Conclusion
    • Income inequality has declined during the last two decades.
    • Globalization, on average, does not lead to increases in inequality.
  • 15. Economic Freedom and Labor force, children 10-14 (% of age group) Least Free ……………. Most Free Sources: The Fraser Institute; The World Bank, World Development Indicators CD-ROM, 2005.
  • 16. Child Labour
    • Amin, Shahina, M. Shakil Quayes, and Janet M. Rives (2004).
    • Poverty and Other Determinants of Child Labor in Bangladesh.
    • Southern Economic Journal. Vol. 70, No. 4.
    • “ [A] family’s poverty affects the probability that a child will work: keeping children away from work is a luxury these families cannot afford” (p. 876).
  • 17. Child Labour
    • Dessy, Sylvain E. and Désiré Vencatachellum (2003).
    • “ Explaining cross-country differences in policy responses to
    • child labour.” Canadian Journal of Economics . Vol. 36, No. 1:
    • February.
    • “ Only rich countries and those that are not “too” poor … benefit from adopting child labour laws” (p. 1).
  • 18. Child Labour
    • Hussain, Mahmood and Keith E. Maskus (2003). Child
    • Labour Use and Economic Growth: An Econometric
    • Analysis. World Economy. Vol. 26(7): 993-1017.
    • Ultimate solution to child labour is to increase the productivity and thus the incomes of parents.
  • 19. Child Labour
    • Edmonds, Eric and Nina Pavcnik (2002). Does Globalization
    • Increase Child Labor? Evidence from Vietnam. NBER Working
    • Paper #W8760. NBER: Cambridge, MA (January).
    • Investigates the impacts of free trade on child labour in Vietnam;
    • Child labour declined from 57% in 1993 to 38% in 1998;
    • The percentage of children not attending school also declined.
  • 20. Conclusion
    • Child labour will not be eliminated by simply banning it.
    • Solution lies in the promotion of policies that lead to economic growth and prosperity.
  • 21. The End
    • Websites:
    • www.fraserinstitute.ca
    • www.freetheworld.com