Trade Adjustment Costs in Developing Countries: - World Bank ...

Trade, Child Labor, and Schooling in Poor Countries 185Figure 11.3: Net Primary School Enrollment and TradeNet Primary School Enrollment from World Development Indicators. See Figure 11.1 for country listand the trade measure. Some countries from Figure 11.1 are missing because of missing net primaryschool enrollment rates in the World Development Indicators. Only countries included in Figure 11.1are included here for comparability.selection, as a similar picture emerges in the full World Development Indicatorscountry list.This observation that the importance of trade in an economy appears uncorrelatedwith child time allocation is consistent with the hypothesis that childrenwork outside export and import-competing sectors. However, child time allocationis correlated with the total quantity of trade in an economy. Figure 11.4 plotseconomic activity rates against the log of total trade in the country, the year.This differs from Figure 11.1 in that it does not scale trade by GDP.Children work less in countries that trade more. In fact 15 per cent of the crosscountryvariation in economic activity rates can be explained by the volume oftrade. A line fitted to the data in Figure 11.4 implies an elasticity of −0.14. Adoubling of trade is associated with a 14 per cent reduction in economic activity,on average, across countries. This observation that children work less in countriesthat trade more is true if one considers exports or imports alone,manufacturing trade, or agricultural trade. The reason for this robust negativecorrelation between economic activity and the volume of trade is that countriesthat trade more are richer, and richer countries have fewer working children.While children are not involved in trade or traded sectors in general, there areexceptions. Any country with large exports of staple crops has the potential tohave large-scale involvement of child labor in exports. However, academic studiesidentifying large-scale participation of children in export or import-compet-