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

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Trade, Child Labor, and Schooling in Poor Countries 189There does not appear to be any evidence linking trade and child labor throughtrade’s effects on returns to education. In fact, evidence of a link between childwork and returns to education is relatively rare (see Edmonds 2008). This is oneof the many indirect channels meriting further study. Despite the many possiblemechanisms through which trade can indirectly affect child time allocation, it issurprising how little evidence there is of an impact of trade working throughanything other than specialization or family incomes.3. TRADE PRINCIPALLY AFFECTS CHILDRENTHROUGH ITS IMPACT ON POVERTYMost studies that map a connection directly between trade and child time allocationfind the effect of trade on living standards to be of critical importance. Thisis probably because most studies are not designed to capture indirect effects, thepotential for direct effects is minimal given how children spend their time, andpoverty is one of the strongest correlates of child labor.Figure 11.5 plots the economic activity rates from Figure 11.1 against GDP percapita (expressed in PPP-adjusted 2005 international dollars). It is not a representationof what is expected to happen to poor countries as they grow richer.Nonetheless, Figure 11.5 makes it clear why child labor is so often closely connectedto poverty.Sixty-two per cent of the cross-country variation in economic activity ratescan be explained by GDP per capita alone. 4 If one were willing to impose a constantelasticity to the estimate, Figure 11.5 implies an elasticity of economic activitywith respect to GDP per capita of −0.72. That is, the data pictured in Figure11.5 imply that a doubling of GDP per capita should be associated with a 72 percent reduction in the economic activity rate of children.The schooling–GDP per capita relationship is similarly strong. Figure 11.6 plots netprimary school enrollments (see Figure 11.3) against GDP per capita. The picture isnot the reciprocal of Figure 11.5, because it is a different data source, and also becausemany out-of-school children are not economically active. In fact, Edmondsand Pavcnik (2005a) document that in the 36 countries they study most ‘out of school’children are not economically active, although they are involved in domestic work.Figures 11.5 and 11.6 do not depict a causal relationship, but the causal evidencegenerally depicts a similarly strong relationship. 5 For example, Edmondsand Schady (2009) consider the response of poor Ecuador families to the receiptof a lottery award that was delivered in the context of a social marketing campaignpromoting human capital investment (although a lottery receipt was not4 Edmonds and Pavcnik (2005) present a similar picture using different data. Using the ILOSTATestimates of economic activity rates of children aged 10 to 14 from 2000, and GDP per capita fromthe Penn World Tables, they find that that three-quarters of the cross-country variation in economicactivity rates of children aged 10 to 14 can be explained by GDP per capita5 Several studies that explore the correlation between household asset wealth and child time allocationdo not find a strong link. Basu et al. (2009) point out that this probably owes to the fact ofthe mixed role that assets play when labor markets are incomplete. Assets proxy for wealth, but theyalso raise the shadow value of child time by making child time in the household more productive.
190Eric V EdmondsFigure 11.5: Economic Activity and Gross Domestic ProductGDP per capita is in constant PPP 2005 international dollars. It is taken from the World DevelopmentIndicators (series NY.GDP.PCAP.PP.KD) online in May 2009. See notes to Figure 11.1 for list of countriesand the definition of the economic activity rate.Figure 11.6: Net Primary School Enrollment and Gross Domestic ProductSee notes to Figure 11.3 and Figure 11.4 for definitions of variables and country information.
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THE WORLD BANKTrade Adjustment Cost
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Trade Adjustment Costs in Developin
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Trade Adjustment Costsin Developing
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viiiContents10. Trade Adjustment an
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List of Tables2.1 Simulated Adjustm
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List of Figures2.1 Worker Flows 262
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PrefaceThe process of globalization
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2Bernard Hoekman and Guido Portopri
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4Bernard Hoekman and Guido Portoequ
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6Bernard Hoekman and Guido Portowou
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8Bernard Hoekman and Guido Portoass
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10Bernard Hoekman and Guido Portoco
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12Bernard Hoekman and Guido PortoJa
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14Bernard Hoekman and Guido Portoma
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18Bernard Hoekman and Guido Portoat
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20Bernard Hoekman and Guido PortoRE
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PART AADJUSTMENT COSTS
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26Carl Davidson and Steven Matusz2.
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28Carl Davidson and Steven Matuszne
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30Carl Davidson and Steven Matuszwh
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32Carl Davidson and Steven MatuszTa
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34Carl Davidson and Steven MatuszSo
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36Carl Davidson and Steven MatuszHi
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38Erhan Artuç and John McLarenof i
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40Erhan Artuç and John McLarenshoc
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42Erhan Artuç and John McLaren1.3
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44Erhan Artuç and John McLarenassu
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46Erhan Artuç and John McLarenin A
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48Erhan Artuç and John McLarenavai
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50Erhan Artuç and John McLarencomp
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52Erhan Artuç and John McLarenFigu
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4Reallocation and Adjustment in the
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Reallocation and Adjustment in the
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5Trade Reforms in Natural-Resource-
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Trade Reforms in Natural-Resource-A
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90Olivier Cadot, Laure Dutoit and M
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100Olivier Cadot, Laure Dutoit and
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7Trade Reform, Employment Allocatio
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Trade Reform, Employment Allocation
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Page 161 and 162: 144Gordon H HansonOn the theory sid
Page 163 and 164: 146Gordon H Hansonberg et al. (2008
Page 165 and 166: 148Gordon H HansonThe expansion of
Page 167 and 168: 150Gordon H Hansonshares and factor
Page 169 and 170: 152Gordon H HansonGoldberg, Pinelop
Page 172 and 173: 9Production Offshoring andLabor Mar
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Page 189 and 190: 172Pravin Krishna and Mine Zeynep S
Page 196 and 197: 11Trade, Child Labor, and Schooling
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Page 215 and 216: 198Gordon H Hanson3.0%2.8%2.6%2.4%2
Page 217 and 218: 200Gordon H HansonTable 12.2: Share
Page 219 and 220: 202Gordon H HansonWho benefits from
Page 221 and 222: 204Gordon H HansonAn older and larg
Page 223 and 224: 206Gordon H HansonTo date, the lite
Page 225 and 226: 208Gordon H Hansontion surplus was
Page 227 and 228: 210Gordon H HansonSome evidence sug
Page 229 and 230: 212Gordon H HansonBIBLIOGRAPHYAcost
Page 231 and 232: 214Gordon H HansonMishra, Prachi 20
Page 233 and 234: 216James Harrigan• China had been
Page 235 and 236: 218James Harrigan2.2 Price and quan
Page 237 and 238: 220James HarriganFigure 13.1a: Pric
Page 239 and 240: 222James Harrigan4. CONCLUSIONThe e
Page 241 and 242: 224Beata S Javorcikices, thus benef
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Page 245 and 246: 228Beata S JavorcikAs the majority
Page 247 and 248: 230Beata S Javorcik5. DOES FDI LEAD
Page 249 and 250: 232Beata S Javorcikthough they do n
Page 251 and 252: 234Beata S Javorcik7. FUTURE RESEAR
Page 253 and 254: 236Beata S JavorcikMarkusen, James
Page 255 and 256: 238Chad P Bownthese theories has on
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240Chad P Bownicy changes affect th
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242Chad P Bownis, the policy-imposi
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244Chad P Bownsignificant distortio
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246Chad P Bownaccession period led
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248Chad P Bown2002-03. 16 However,
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250Chad P Bowntive adjustment impac
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PART CFACTORS THATAFFECT TRADE
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256David Hummelsative advantage for
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258David Hummelsprices shift demand
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260David HummelsThe second form of
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262David Hummelsdogenous to how pro
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17The Duration of Trade Relationshi
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The Duration of Trade Relationships
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18Openness and Export Dynamics:New
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Openness and Export Dynamics: New r
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19Market Penetration Costs andInter
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Market Penetration Cost and Interna
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20Taking Advantage of Trade:The rol
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Taking Advantage of Trade: The role
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21Credit Constraints and the Adjust
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Credit Constraints and the Adjustme
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332Miet Maertens and Jo Swinnenmeas
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336Miet Maertens and Jo Swinnenacti
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338Miet Maertens and Jo Swinnenfirm
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340Miet Maertens and Jo SwinnenBIBL
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342Miet Maertens and Jo SwinnenRear
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23Notes on American Adjustment Poli
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Notes on American Adjustment Polici
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362Johan F M Swinnen and Kristine V
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This book summarizes the state of k
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