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

Trade, Child Labor, and Schooling in Poor Countries 187averages rather than specific cases. The 200,000 children in cocoa farms in Coted’Ivoire are less than 7 per cent of economically active children in Cote d’Ivoire.The 300,000 children in the carpet sector in the Indian subcontinent is small comparedto the 8.4 million economically active children aged 10 to 14 in India alone.Job-specific studies may be able to identify an impact of trade on some types ofchild employment; but the more specific the study focus, the more difficult it isto know what children would be doing if it were not for their involvement inthat specific export job. Hence, focusing on specific types of employment createsa whole new set of inference problems.When we start to focus on older youths and young adults, employment in formalsector work and export-oriented manufacture becomes more prevalent.Hence, the possibility of finding an impact of trade on the time allocation ofolder youths is plausible. David Atkin (2009) notes that export sector jobs payhigher wages than non-export sector jobs in Mexico. He shows that the growthin export sector jobs between 1986 and 2000 induced youths to leave school earlierthan they would have done if the jobs had never existed. These export jobspay more initially but offer a flatter growth profile than these youths would havehad if the export jobs had not come, if the students then stayed in school, accumulatedmore education, and entered other formal jobs. His magnitudes are large.For every 10 new jobs created, he finds that one student drops out of school atGrade 9 rather than at Grade 12.In general, children under 15 are not working directly in trade or traded sectors.Hence, there is little evidence of a direct effect of changes in employmentopportunities associated with trade on child labor or schooling, although there issome recent evidence of an impact of trade on youths over 14 in Mexico. Thereare certainly some sectors where children are involved in export or import-competingtasks, these sectors are sufficiently narrow that they are difficult to capturewith nationally representative or aggregate data. Narrower studies arefeasible, but are largely absent from existing research because of the problem ofdrawing inference from unique populations.2. INDIRECT EFFECTS OF TRADE ON CHILD EMPLOYMENTOPPORTUNITIES CAN BE IMPORTANTThe indirect effects of trade on relative prices can be very important. A large literaturein trade debates the relative important of trade’s influence on firm size,market structure, firm productivity, input choice, technology, and factor (especiallyskill) intensity, and thereby inequality and returns to education. Diffuseand general equilibrium effects are notoriously difficult to identify in the data.However, there are several papers that point to a role for indirect effects of tradeon child labor and schooling.One study in Brazil suggests an important role for an indirect effect of trade,even though it does not identify how the indirect effect is working. Kruger (2007)compares changes in child labor and schooling in Northeast Brazil during a coffeeboom to areas that do not export coffee. Her study is intriguing, because chil-