Labour Market Reform and Incidence of Child Labour in a Developing Economy

The paper is purported to examine the consequences of possible labour market reform in the developing economies on the incidence of child labour and economic well-being of the child labour supplying families. A two-sector, full-employment general equilibrium structure with child labour and imperfection in the market for adult labour has been used for the analytical purpose. Although this policy is likely to lower the incidence of child labour the welfare of the families supplying child labour worsens. The paper, therefore, questions the desirability of a policy designed at mitigating the child labour problem especially when it makes the poor families worse off.