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  1. Eric V. Edmonds, “Child Labor”, NBER Working Papers Series
  2. International Labor Organization (www.ilo.org
  3. United Nations Children’s Fund (www.unicef.org) 
  4. Govt. of India, Ministry of labour (www.labour.nic.in
  5. National Commission for Protection of Child Rights (www.ncpcr.gov.in
  6. Saqib Jafarey, “Child Labour: Theory, Policy and Evidence”, Department of Economics, University of Wales Swansea 
  7. Basu, K. and P.H.Van, "The economics of child labor", American Economic Review 
  8. “Magnitude of Child Labour”, NCPCR 
  9. “Child labour”, Volume 2 By Gopal Bhargava 
  10. Wikipedia.org 
  11. State Child Labour rehabilitation Cum Welfare Society (www.childlabour.tn.gov.in
  12. “The economics of child labour” By Alessandro Cigno, Furio C. Rosati
Child labour is a significant problem in South East Asia, Sub-Saharan Africa and the Latin American Countries. These regions are relatively backward as compared to the rest of the world and the problem of child labour is a symptom as well as a cause of this backwardness.

The major determinant of child labour is poverty. Even though children are paid less than adults, whatever income they earn is of benefit to poor families. In addition to poverty, the lack of adequate and accessible sources of credit forces poor parents to engage their children in the harsher form of child labour -- bonded child labour. Some parents also feel that a formal education is not beneficial, and that children learn work skills through labour at a young age. These views are narrow and do not take the long term developmental benefits of education into account. Another determinant is access to education. In some areas, education is not affordable, or is found to be inadequate. With no other alternatives, children spend their time working.

The Constitution of India clearly states that child labour is wrong and that measures should be taken to end it. The government of India has implemented the Child Labour Act in 1986 that outlaws child labour in certain areas and sets the minimum age of employment at fourteen. This Act falls short of making all child labour illegal, and fails to meet the ILO guideline concerning the minimum age of employment set at fifteen years of age. Though policies are in place that could potentially reduce the incidence of child labour, enforcement is a problem. If child labour is to be eradicated in India, the government and those responsible for enforcement need to start doing their jobs. Policies can and will be developed concerning child labour, but without enforcement they are all useless.

The state of education in India also needs to be improved. High illiteracy and dropout rates are reflective of the inadequacy of the educational system. Poverty plays a role in the ineffectiveness of the educational system. Dropout rates are high because children are forced to work in order to support their families. The attitudes of the people also contribute to the lack of enrollment -- parents feel that work develops skills that can be used to earn an income, while education does not help in this matter. Compulsory education may help in regard to these attitudes. The examples of Sri Lanka and Kerala show that compulsory education has worked in those areas. There are differences between Sri Lanka, Kerala and the rest of India. What types of social welfare structures do these places have? What are the attitudes of the people? Is there some other reason why the labour market for child labourers is poor in these areas? These are some questions that need to be answered before applying the concept of compulsory education to India? India is making progress in terms of educational policy. The DPEP has been implemented only four years ago, and so results are not apparent at this time. Hopefully the future will show that this program has made progress towards universal education, and eradicating child labour.

Child labour cannot be eliminated by focusing on one determinant, for example education, or by brute enforcement of child labour laws. The government of India must ensure that the needs of the poor are filled before attacking child labour. If poverty is addressed, the need for child labour will automatically diminish. No matter how hard India tries, child labour always will exist until the need for it is removed. The development of India as a nation is being hampered by child labour. Children are growing up illiterate because they have been working and not attending school. A cycle of poverty is formed and the need for child labour is reborn after every generation. India needs to address the situation by tackling the underlying causes of child labour through governmental policies and the enforcement of these policies. Only then will India succeed in the fight against child labour.
In pursuit of India’s development goals and strategies, A National Child Labour Policy, was adopted in 1987. The national policy reiterates the directive principle of state policy in India’s Constitution. It seeks to focus on general development programs to benefit children wherever possible and have project based action plans in areas of high concentration of child labour engaged in wage/quasi-wage employment. The National Child Labour Policy was adopted following the Child Labour Act, 1986.

The Ministry of Labour has been implementing the NCLP through the establishment of various projects for the rehabilitation of child workers since 1988. Initially these measures were industry specific and aimed at rehabilitating children working in traditional labour intensive industries. A renewed commitment to fulfilling the constitutional mandate resulted in enlarging the ambit of NCLPs in 1994 to rehabilitate children working in hazardous occupations.

The Action Plan outlined in the Policy for tackling this problem is as follows: 
  • Legislative Action Plan for strict enforcement of Child Labour Act and other labour laws to ensure that children are not employed in hazardous employments, and that the working conditions of children working in non-hazardous areas are regulated in accordance with the provisions of the Child Labour Act. It also entails further identification of additional occupations and processes, which are detrimental to the health and safety of the children.
  • Focusing of General Developmental Programmes for Benefiting Child Labour - As poverty is the root cause of child labour, the action plan emphasizes the need to cover these children and their families also under various poverty alleviation and employment generation schemes of the Government. 
  • Project Based Plan of Action envisages starting of projects in areas of high concentration of child labour. Pursuant to this, in 1988, the National Child Labour Project (NCLP) Scheme was launched in 9 districts of high child labour endemicity in the country. The Scheme envisages running of special schools for child labour withdrawn from work. In the special schools, these children are provided formal/non-formal education along with vocational training, a stipend of Rs.100 per month; supplementary nutrition and regular health check ups so as to prepare them to join regular mainstream schools. Under the Scheme, funds are given to the District Collectors for running special schools for child labour. Most of these schools are run by the NGOs in the district. 
Government has accordingly been taking proactive steps to tackle this problem through strict enforcement of legislative provisions along with simultaneous rehabilitative measures. State Governments, which are the appropriate implementing authorities, have been conducting regular inspections and raids to detect cases of violations. Since poverty is the root cause of this problem, and enforcement alone cannot help solve it, Government has been laying a lot of emphasis on the rehabilitation of these children and on improving the economic conditions of their families.

During the Tenth Five Year Plan, children in the age group of 5 – 9 years were enrolled directly under the Sarva Shiksha Abhiyan. Further, those in the age group of 9 – 14 were admitted to special schools under the NCLP schemes. Besides this, components of healthcare and vocational training were augmented. Schemes for children under the 10th Five Year Plan include the integrated Programme for Street Children which aims to prevent the destitution of children and engineer their withdrawal from the streets by providing facilities like shelter, nutrition, health care, education, recreation and protection against abuse and exploitation.

The strategy outlined for the 11th Five Year Plan includes expanding the NCLP to ensure universal enrollment in the 6 – 14 age group. The government seeks to amend all laws to recognize everyone under the age of 18 as children and to take appropriate measures to protect their rights accordingly.
The total elimination of child labour is a task fraught with difficulties. It is a problem that is closely intertwined with some of the greatest challenges faced by the world such as poverty, illiteracy, unemployment etc. No amount of legislation can combat child labour until these root causes are addressed.

The first convention of the ILO in 1919 fixed the Maximum hours of work in a week at 48 hrs as well as the minimum age of employment at 14. Thereafter through an amendment in 1922, the minimum age was increased to 15.

The Conventions of the International Labour Organization, the 1930 and 1956 Forced Labour Conventions and the UN Convention on the rights of a child are the major tools for regulation of child labour. Some other instruments used for the regulation of child labour were:

Article 32 of the UN Convention on the Rights of the Child (1989): “State parties recognize the right of the child to be protected from economic exploitation and from performing any work that is likely to be hazardous or to interfere with the child’s education or to be harmful to the child’s health or physical, mental, spiritual, moral or social development.

Convention 182 of the ILO (1999): The main of convention 182 is to eliminate the worst forms of child labour. It stresses that immediate action is needed to tackle the worst exploitation of children. The Convention also decided upon the various measures to be implemented by the governments upon the ratification of the convention.

International Program On Elimination of Child Labour: The ILO’s International Programme on the Elimination of Child Labour (IPEC) was created in 1992 with the overall goal of the progressive elimination of child labour, which was to be achieved through strengthening the capacity of countries to deal with the problem and promoting a worldwide movement to combat child labour. IPEC currently has operations in 88 countries, with an annual expenditure on technical cooperation projects that reached over US$61 million in 2008. It is the largest programme of its kind globally and the biggest single operational programme of the ILO.

While the goal of IPEC remains the prevention and elimination of all forms of child labour, the priority targets for immediate action are the worst forms of child labour, which are defined in the ILO Convention on the worst forms of child labour, 1999 (No. 182) as:

  • All forms of slavery or practices similar to slavery. 
  • Such as the sale and trafficking of children 
  • debt bondage and serfdom and forced or compulsory labour, including forced or compulsory recruitment of children for use in armed conflict; 
  • the use, procuring or offering of a child for prostitution, for the production of pornography or for pornographic performances; 
  • the use, procuring or offering of a child for illicit activities, in particular for the production and trafficking of drugs as defined in the relevant international treaties; 
  •  work which, by its nature or the circumstances in which it is carried out, is likely to harm the health, safety or morals of children.
After nearly 59 years of Independence and over a decade after India became a signatory to the United Nations Convention on Child Rights, our children continue to be the most neglected segment. Statistics reveal that India has 17 million child labourers -- the highest in the world. Lack of awareness about the basic rights of a child has lead to easy violation of laws meant to protect and empower children. In homes, on the streets and in sweatshops, children are being exploited by the thousands. Moreover, unrelenting poverty forces the parents to push their young children in all forms of hazardous occupations. Child labor is a source of income for poor families. They provide help in household enterprises or of household chores in order to free adult household members for economic activity elsewhere. In some cases, the study found that a child's income accounted for between 34 and 37 percent of the total household income.

Where do these children work?

Over half of the working children (54%) are in agriculture, and most others are employed either in construction (15.5%) or in household work (18%). About 5% are in manufacturing jobs, and the remainder (about 8%) are scattered across other forms of employment. The table below provides a gender-wise breakup of working children, and their schooling status. Please note that the data are for children in the age group 5-14 years.

Children of Age Group (5-14 years)
Number of Children (%)
Number of Children (in 100's)


Children engaged in "economic activities"
Attended domestic duties only
Attended domestic duties plus free collection of goods, tailoring, weaving for HH only
Children at Work
Attending schools
Children neither at work nor at school

Children Labour Statistics
  • Street Children - Child welfare organisations estimate that there are 500,000 street children nation-wide
  • 5,000 children work in the silk industry 
  • In Bombay and Bangalore more than 100,000 children work as rag-pickers 
  • Glass and Bangle Industry - In the glass bangle industry in Ferozabad, one quarter of the workforce - about 50,000 - are children under 14 years of age. (UNICEF, State of the World's Children, 1997) 
  • Fireworks and Match Production - 125,000 work in the match industry. 
  • Diamond and Gemstone Industry - 6,000 to 100,000 children working in the diamond industry, cutting and polishing diamond chips. (US Dept of Labor, Sweat and Toil of Children, 1994, citing ILRF, Trading Away the Future, 1994) 
  • There are no universally accepted figures for the number of bonded child labourers. However, in the carpet industry alone, human rights organisations estimate that there may be as many as 300,000 children working, many of them under conditions that amount to bonded labour. 
  • Some NGOs estimate that the number of bonded labourers is 5 million persons. However, in a report released during the year, Human Rights Watch estimated that 40 million persons, including 15 million children, are bonded labourers. The report notes that the majority of bonded labourers are Dalits, and that bondage is passed from one generation to the next 
  • Over 1 million girls and women are believed to be forced into the sex industry within the country at any given time. Women's rights organizations and NGO's estimate that more than 12,000 and perhaps as many as 50,000 women and children are trafficked into the country annually from neighboring states for the sex trade. (US Dept of State, Country Reports on Human Rights Practices - 2000, February 2001) 
  • According to an ILO estimate, 15% of the country's estimated 2.3 million prostitutes are children. The traffic is controlled largely by organized crime. (US Dept of State, Country Reports on Human Rights Practices - 2000, February 2001) 
  • There are child soldiers in every insurgent group in Manipur, including, apparently, children under 15 years of age. The lowest age recorded is 11 years. It is estimated that the number of child soldiers is between 6,000 and 7,500, which is equivalent to around 50% of the total group membership. It is further claimed that the recent trend is to induct more and more girls into insurgency movement in order to avoid suspicion on the hard core activists. The number of girl soldiers is said to be between 900 and 1,000, i.e., 6-7% of child soldiers. (CSUCS, Asia Report, July 2000, citing a local research project quoted by Rädda Barnen) 
  • In the Assam insurgency approximately 9-10% of soldiers are girls, numbering 3,000-4,000, with the lowest recorded age at 12 years. (Rädda Barnen, Childwar database) 
  • A survey in India, noted that 17% of domestic workers were under 15 years old and also reported that girls aged 12 to 15 were the preferred choice of 90% of employing households. (UNICEF, State of the World's Children, 1997)

The following table gives the state wise distribution of working children:

Magnitude of Child Labour

Children Out of School
The Kerala Experience

The state of Kerala distinguishes itself from the rest of India with its education system. The government of Kerala allocates more funds to education than any other state. It is not only the expenditure of more funds, but where the funds are used that makes the difference. Kerala spends more money on mass education than on colleges or universities.

Kerala’s emphasis on primary education has led to a dropout rate of close to 0%, a literacy rate of 94% for males and 86% for females, and a low child work participation rate of 1.9% compared to the Indian average of 7.1%. It is noteworthy that the Kerala government has made no special effort to end child labour. It is the expansion of the school system rather than the enforcement of labour legislation that has reduced the amount of child labour.
Key Statistics:
  • 246 million children work as child labourers.
  • 73 million working children are less than 10 years old.
  • Every year 22,000 children die in work related activities.
  • The largest number of working children – age 14 and under – are in the Asia Pacific region.
  • Sub-Saharan Africa has the largest proportion of working children: nearly one third of children age 14 and under (48 million children)
  • Most children work in the informal sector, without legal or regulatory protection.
  • 60% in agriculture, commercial hunting and fishing or forestry.
  • 8% in manufacturing 
  • 7% in wholesale
  • 25% in community, social and personal service such as domestic work.
  • 8.4 million children are trapped in slavery, trafficking, debt bondage, prostitution, pornography and other illicit activities. 1.2 million of these children have been trafficked. 
  • The estimated cost of the elimination of child labour is US$760 billion over a 20-year period. The estimated benefit in terms of better education and health is over US$4 trillion. The benefits would therefore outweigh the costs by nearly 6 to 1.

Prevelance of Child Labour in The World

Prevalence of Child Labour in The World

  • Child labour deprives the child of a proper childhood. He is not able to get the nurture and care that is essential for his all round development. This may lead to many psychological imbalances which are often expressed in the form of increased aggressiveness, low self esteem etc.
  • A child labourer remains uneducated and is unable to take care of his own family when he grows up. This forces him to make his children work and thus the cycle is perpetuated. 
  • Children reach mental and emotional maturity at a very early age. This is highly dangerous as such children start displaying pseudo adult behaviour such as smoking and displays of aggression. 
  • Children and young people are often paid much less for work done than adults while being forced to work as much as adults. Thus pushing adults competing for jobs out of the market. 
  • Many children who work either withdraw from school or find that their educational performance declines because of the work they are doing. Lewis Hine summed this up best in these words: “There is work that profits children, and there is work that brings profits only to employers. The object of employing children is not to train them, but to get high profits form their work.” 
  • Throughout history, children have been working under very unhealthy and hazardous conditions. Their working environments were so unsafe that fatal accidents were an everyday routine. Presently, there are about 250 million children under the age of 15 who are a part of the labor industry. The working conditions have not changed; in fact, they have gotten worse. 
  • Growth deficiency is prevalent among working children, who tend to be shorter and lighter than other children; these deficiencies also impact on their adult life
Some of the economic conditions under which child labour exists have been stated in the “Why Do Children Work? Theory and Evidence” section of this project. But apart from these economic reasons there are a number of cultural or systemic reasons responsible for this malice. A few of them are as follows:

Parental Illiteracy .

Many underdeveloped and developing countries such as India are plagued by the problem of widespread illiteracy. It is difficult for uneducated parents to fully understand the importance of education for their children. When faced with the tradeoff between sending their children to school or sending them to work, they often choose the one with the more immediate benefits. Also, a child’s willingness to learn is influenced by the attitudes of those around him. In the absence of an environment that encourages him to study, the child looses interest.

Tradition of making children learn the family skills

In India social structures have acquired a rigidity that makes it very difficult for an individual to break free of the strictures that direct him from the time he is born. People expect their progeny to follow in their footsteps. They are trained from their childhood in the profession that the family has been following since ages. Children are forbidden from exploring other avenues. Because of this, the children of labourers, craftsmen etc. start working with their parents at a very young age. They are thus unable to avail of a formal education.

Absence of universal compulsory Primary education

Although governments in many countries of the world promise free and compulsory education to all children, the logistics of implementation are often daunting in a country with a population as large as India’s. Compulsory primary education does not guarantee the elimination of child labour. A large number of child labourers go to school and work in the hours after that. But the biggest impact of literacy in the greater number of options that children have once they are through with their studies.

Ineffective Labour Legislations

The governing authority of our country has passed many laws which help in the abolishment of child labour but these laws have largely remained only on paper. Some of these legislations are: Employment of Children Act in 1938, The Juvenile Justice Act of 1981 and The Shop and Establishment Act of 1996. Due to large scale corruption and general apathy of the law enforcement agencies, these laws are very rarely implemented.

Lack of Social Security

India’s poor are mostly self employed or work in unorganized sectors which do not provide their employees with any sort of a pension. Once they are out of their jobs or in the case of the death of the breadwinner in the family, the households have no resort but to force their children to work.

Irrelevant and non-attractive school curriculum 

The curriculum followed in most schools is not designed to grab the attention of the student. With a heavy emphasis on rote learning, children are bored very soon and the opportunity to go out and work somewhere seems to be more appealing. Moreover very little technical training is imparted in schools. Even after devoting many years of their lives to schooling, the child is not equipped with any technical skills that will fetch him a decent wage in the market. Without some immediate benefits accruing to the children due to their education, the incentive to work is increased.

Lack of organization

Adult labour in a most industries is organized under trade unions which allows them to have a platform to express their grievances and through the might of collective action, fight against injustice. But children are incapable of organizing themselves into such unions. This forces them to work at the lowest of wages, in the worst possible conditions.

Bonded Child Labour 

There are many cases of child labor where a child has to work against the repayment of a loan which was taken by his father who was unable to pay it off. This is called as 'bonded child labour'. Bonded child labor normally happens in villages. Such children work like slaves in order to pay the loan taken. Not only poor families, but some well established business families also put their children into business at a quite young age instead of making them complete their education.


Children born out of wedlock, children with no parents and relatives, often do not find anyone to support them. Thus they are forced to work for their own living.
Child labour in some form or the other has always existed in societies all over the world. Children used to accompany their parents while working in the fields. Moreover they were also expected to help with household chores as well as taking care of the sick and elderly. As most of the work was being done under the watchful eyes of the parents, instances of exploitation were rare. Even today work of this sort is not considered exploitative.

The worst forms of the exploitation of children started during the Industrial Revolution. It was at this time that machinery took over many functions formerly performed by hand and was centralized in large factories. There was a large scale structural shift in employment patterns. Many artisans lost their jobs and were forced to work in these factories. But the owners of these factories realized that operating many of these machines did not require adult strength, and children could be hired much more cheaply than adults.

Children had always worked, especially in farming. But factory work was hard. A child with a factory job might work 12 to 18 hours a day, six days a week, to earn a dollar. Many children began working before the age of 7, tending machines in spinning mills or hauling heavy loads. The factories were often damp, dark, and dirty. Some children worked underground, in coal mines. The working children had no time to play or go to school, and little time to rest. They often became ill.

Many of the jobs that these children specialized in were very dangerous. E.g.: The youngest children in the textile factories were usually employed as scavengers and piecers. Scavengers had to pick up the loose cotton from under the machinery. This was extremely dangerous as the children were expected to carry out the task while the machine was still working. While the piecers had the job of fixing broken threads. It is estimated that these piecers walked almost 20 miles in a single day.

Another barbaric practice followed in Victorian times was the use of children as chimney sweeps. Children were also employed to work in coal mines to crawl through tunnels too narrow and low for adults. They also worked as errand boys, crossing sweepers, shoe blacks, or selling matches, flowers and other cheap goods. Some children undertook work as apprentices to respectable trades, such as building or as domestic servants. By 1810 about 2,000,000 children were working 50 to 70 hours a week. About 2/3rds of the total workers in the textile industry were children.
Church and labor groups, teachers, and many other people were outraged by such cruelty. They began to press for reforms. The English writer Charles Dickens helped publicize the evils of child labor with his novel Oliver Twist. Two Factory Acts were implemented in 1802 and 1809. Both these acts set limits on the maximum number of hours that a child was allowed to work in a day. But the implementation of these laws was lax and it had very little effect.

In the United States it took many years to outlaw child labour. Connecticut passed a law in 1813 saying that working children must have some schooling. By 1899 a total of 28 states had passed laws regulating child labor. Today all the states and the U.S. Government have laws regulating child labour. These laws have cured the worst evils of children's working in factories. But some kinds of work are not regulated. Children of migrant workers, for example, have no legal protection. Farmers may legally employ them outside of school hours. The children pick crops in the fields and move from place to place, so they get little schooling.

In India child labour has always existed in the agricultural sector. Children and their parents used to work together in the farms. Moreover the task of taking the cattle to graze was always allotted to children. Although this work was hard and tiring, it did not lead to a worsening of their future prospects. Schooling was not available in most villages and most of the jobs were still in the agricultural sector. So this work served as training for their future. Large scale exploitation of children in India began with the arrival of the British. Just as the case was in Great Britain, the new industrialists started hiring children who were forced to work in inhuman conditions. Laws against child labour were passed under Employment of Children Act of 1938. These attempts at legislation failed as they failed to address the root cause of child labour in India: poverty. Until and unless the populace was brought out of poverty, it was impossible to take the children out of the labour force.

Economic theories of child labour have, with a few exceptions, been based on some shared premises. First, that child labour is socially undesirable and its reduction a worthy goal. Second, that there are other, more desirable, activities in which a child can engage, namely school attendance and leisure. Third, that the child labour decision is a prerogative of the parent, not of the child. However, the parent is motivated not by narrow self-interest but by a rational and benevolent outlook which takes into account the welfare of the whole household, including that of the child. In this context, the parent shares in the undesirable consequences of child labour.

If parents dislike child labour, then the decision to impose it upon their children must be based on the economic conditions facing the household. It is fair to say that a single factor has been emphasized in all economic explanations of child labour: abject poverty. But in precisely what fashion does poverty influence child labour? This is where differences arise.

Child Labour and Adult Labour:

In 1998 Basu and Van showed that the link between child labour and poverty can be mutually reinforcing. They construct a model in which children can either work or enjoy leisure. Parents value the latter and not the former. However, child leisure is a “luxury” in that only sufficiently rich households can afford to “buy” it. Also, child workers can substitute for adult workers in the labour market, even though each child may be only fractionally as productive as an adult. This substitutability implies that entry into the workforce by children leads to a fall in wages for adults. This reinforces the absence of child leisure.

These possibilities bear several interesting implications. First, individual households have no control over which outcome occurs. Even if individual parents were to withdraw their own children from work, this would raise market wages only slightly; to move the wage sufficiently requires withdrawal of children by a significant proportion of households.

Child Labour and Credit Markets:

A second strand of research has studied the tradeoff between labour and schooling. This overlaps with a large and influential body of research, known as "endogenous growth theory". This theory maintains that long-run, sustainable growth is made possible by continuous increases in an economy's stock of knowledge. Education plays an integral part in this process by disseminating knowledge across the population. There are also spillover effects: in an economy where a large proportion of workers are educated, even the uneducated ones are more productive and receive high wages. A high incidence of child labour obviously interferes with these mechanisms of economic prosperity and growth.

Credit markets can affect the tradeoff between child labour and schooling. It is widely believed that by acquiring at least primary education, children are able to enhance their wage-earning potential later in life. Whether this is true or not is open to question, one that we shall discuss later on. In any case, any increase in wages accrues only after the schooling process is over, which could take five years at the minimum. During this period, the household forgoes the income the child could have earned by working instead. If households could borrow at reasonable terms against the child's higher future earnings, sending children to work might be unnecessary. In the absence of credit, however, the lost income from the child's formative years could very well tilt the balance against schooling. This implies that if credit markets allow households to borrow against their child’s future earnings, child labour will cease to exist so long as the returns from education are high enough.

A related theory put forward by Jacoby and Skoufias explained that parents treated child labour as buffers during harsh economic times: Children were sent to school during periods of relative prosperity and were made to work during the time of hardship.

Education Quality and Child Labour:

As mentioned in the preceding subsection, credit markets can affect the tradeoff between child labour and schooling. The extent of this tradeoff depends, inter alia, upon the returns to education, which in turn depend upon the quality of schools. Most economists assume that the returns to education are high enough so that in the presence of a perfectly functioning credit market, child labour would not exist. This is partly under the influence of the empirical literature on endogenous growth theory, which has found that higher schooling levels in developing countries can have growth-enhancing effects on their economies. However, even if the overall impact of schooling is positive, this does not mean that all schools in a country impart an education of sufficient quality to benefit its recipients.

Studies done in Asia and Sub-Saharan Africa by Psacharopoulos report discounted returns on the order of 20-40 percent. Such rates of return imply that borrowing for children's education would be profitable even at interest rates of 20 percent per annum or higher. But studies by Jean Dreze indicate that in most rural parts of northern India the state of education was so bad that parents did not see the point of sending their kids to school.

Child Labour and Poverty Traps

While all economic studies touch upon poverty as a causal factor in child labour, one branch of the literature emphasizes the reverse, i.e. child labour as a cause of poverty. This literature studies child labour decisions for successive generations of the same family. In any generation, children who work do not go to school and do not acquire the skills needed to earn decent wages as adults. Upon becoming parents themselves, they send their own children to work. Yet another generation misses out on an education and, in its own turn, sends its own children to work. This vicious circle is known as a “poverty trap”.
Any discussion of child labour must begin with a precise description of what the term means. The phrase "child labour" conjures images of children chained into factories, sold as slaves, or forced into prostitution. Fortunately, while many children work in the developing world, few experience such atrocities. Most of these working children labeled "child labourers" are helping their family at home, on the family farm, or in the family business.

There is a huge amount of heterogeneity that prevails amongst scholars when it comes to defining child labour. We will look at some of the more widely accepted definitions.


The term “child labour” is often defined as work that deprives children of their childhood, their potential and their dignity, and that is harmful to physical and mental development.

It refers to work that:
  • is mentally, physically, socially or morally dangerous and harmful to children; and
  • interferes with their schooling by:
  • depriving them of the opportunity to attend school;
  • obliging them to leave school prematurely; or
  • requiring them to attempt to combine school attendance with excessively long and heavy work.

UNICEF defines child labour as work that exceeds a minimum number of hours, depending on the age of a child and on the type of work. Such work is considered harmful to the child and should therefore be eliminated.
  • Ages 5-11: At least one hour of economic work or 28 hours of domestic work per week.
  • Ages 12-14: At least 14 hours of economic work or 28 hours of domestic work per week.
  • Ages 15-17: At least 43 hours of economic or domestic work per week.
Government of India:

India sought to prohibit child labour under THE CHILD LABOUR (PROHIBITION AND REGUALTION) ACT, 1986. The Government of India realized that complete abolition of child labour was not possible and hence drew up a list of occupations considered hazardous under Annexure A of the aforementioned Act. Some of these prohibited occupations are: Any work related to mines, plastic units, handlooms, foundries etc.

National Commission for Protection of Child Rights:

“The definition of child labour must encompass children working for the families in their own homes, children in agriculture work, work rendered by girl children and all other forms of work that deprives them of their right to education in a full-time, formal school. In other words, the definition of child labour must be inclusive and it should recognize all forms of child labour as prohibitive. Finally child labour must include children up to 18 years of age. The NCPCR calls for consonance between child labour law and the 86th amendment to the constitution of India which guarantees education as a fundamental right to all children in the 6-14 age group.”
I recently completed a class project on child labour. I will be publishing it in its entirety on the blog.


“There is no trust more sacred than the one the world holds with children. There is no duty more important than ensuring that their rights are respected, that their welfare is protected, that their lives are free from fear and want and that they can grow up in peace.”
-Kofi Annan

One in every five children aged 5 to 17 in the world today is involved in child labour, doing work that is damaging to his/her mental, physical and emotional development. These children risk their health and their lives and mortgage their lives as future adults.

These children work in a variety of industries, and in many parts of the world. The vast majority are in the agricultural sector, where they may be exposed to dangerous chemicals and equipments. Others are street children, peddling or running errands to earn a living. Some are domestic workers, prostitutes, or factory workers. All are children who have no fair chance of a real childhood, an education or a better life.
Children work because their survival and that of their families depends on it. Child labour persists even where it has been declared illegal, and is frequently surrounded by a wall of silence, indifference and apathy.

In totality there are estimated to be about 218 million child labourers. Of these 73 million working children are less than 10 years old. The realization of the full potential of a nation is closely wound with the quality of human capital it has. But when such large numbers of children are forced to work instead of study, the nation’s growth is stunted.

Child labour is often thought of as endemic to the underdeveloped parts of the world. But the sad truth is that no country is immune. There are 2.5 million working children in the developed countries and another 2.5 million working in the transition economies.

India is one of the worst affected countries. Conservative estimates peg the number of child workers at 20 million. For a country with aspirations of being seated at the high table of global economic powers, this is one problem that cannot be swept under the carpet.

A number of methods are used to estimate the total economic activity in a country or a region. Some of the commonly used measures of regional income and output are:

  • Gross Domestic Product (GDP)
  • Gross National Product (GNP)
  • Net National Income (NNI)

These measures are for the most part limited to counting goods and services that are exchanged for money: production not for sale but for barter, for one's own personal use, or for one's family, is largely left out of these measures, although some attempts are made to include some of those kinds of production by imputing monetary values to them.

In order to count a good or service it is necessary to assign some value to it. The value that all of the measures discussed here assign to a good or service is its market value – the price it fetches when bought or sold. No attempt is made to estimate the actual usefulness of a product.

Some useful terms

Gross: Total product, regardless of the use to which it is subsequently put.
Net: Gross minus the amount that must be used to offset depreciation – ie., wear-and-tear of the nation's fixed capital assets. "Net" gives an indication of how much product is actually available for consumption or new investment.
Domestic: The term domestic implies that the  boundary is geographical: we are counting all goods and services produced within the country's borders, regardless of by whom it is produced.
National: The term national implies that the boundary is defined by citizenship (nationality). We count all goods and services produced by the nationals of the country (or businesses owned by them) regardless of where that production physically takes place.The output of a America-owned cotton factory in India counts as part of the Domestic figures for India, but the National figures of America.

From the above it is clear that while GDP is product produced withing the nation's borders, GNP would be the product produced by the citizens of the country or region. Similarly "Net" products for both national and domestic boundaries can be defined. The income of a particular state may be referred to as the State Domestic Product which is similar to the Gross Domestic Product.

There are three main methods of calculating GDP, they are as follows:

1) Expenditure Method

In contemporary economies, most things produced are produced for sale. Therefore, measuring the total expenditure of money used to buy things is a way of measuring production. This is known as the expenditure method of calculating GDP. Note that if you knit yourself a sweater, it is production but does not get counted as GDP because it is never sold. Sweater-knitting is a small part of the economy, but if one counts some major activities such as child-rearing (generally unpaid) as production, GDP ceases to be an accurate indicator of production.

GDP (Y) is a sum of Consumption (C), Investment (I), Government Spending (G) and Net Exports (X - M).

Y = C + I + G + (X − M)

C (consumption): It is normally the largest GDP component in the economy, consisting of private (household final consumption expenditure) in the economy. These personal expenditures fall under one of the following categories: durable goods, non-durable goods, and services. Examples include food, rent, jewelry, gasoline, and medical expenses but does not include the purchase of new housing.
I (investment): It includes business investment in equipments and does not include exchanges of existing assets. Examples include construction of a new mine, purchase of software, or purchase of machinery and equipment for a factory. Spending by households (not government) on new houses is also included in Investment. In contrast to its colloquial meaning, 'Investment' in GDP does not mean purchases of financial products. Buying financial products is classed as 'saving', as opposed to investment. This avoids double-counting: if one buys shares in a company, and the company uses the money received to buy plant, equipment, etc., the amount will be counted toward GDP when the company spends the money on those things; to also count it when one gives it to the company would be to count two times an amount that only corresponds to one group of products. Buying bonds or stocks is a swapping of deeds, a transfer of claims on future production, not directly an expenditure on products.
G (government spending): It is the sum of government expenditures on final goods and services. It includes salaries of public servants, purchase of weapons for the military, and any investment expenditure by a government. It does not include any transfer payments, such associal security or unemployment benefits.
X (exports) represents gross exports. GDP captures the amount a country produces, including goods and services produced for other nations' consumption, therefore exports are added.
M (imports): represents gross imports. Imports are subtracted since imported goods will be included in the terms G, I, or C, and must be deducted to avoid counting foreign supply as domestic.
Note that C, G, and I are expenditures on final goods and services; expenditures on intermediate goods and services do not count. (Intermediate goods and services are those used by businesses to produce other goods and services within the accounting year.)

2) Income Method

Another way of measuring GDP is to measure total income. If GDP is calculated this way it is sometimes called Gross Domestic Income (GDI), or GDP(I). GDI should provide the same amount as the expenditure method described above. (By definition, GDI = GDP. In practice, however, measurement errors will make the two figures slightly off when reported by national statistical agencies.)

Total income can be subdivided according to various schemes, leading to various formulae for GDP measured by the income approach. A common one is:

GDP = compensation of employees + gross operating surplus + gross mixed income + taxes less subsidies on production and imports

GDP = COE + GOS + GMI + T - S

Compensation of employees (COE): It measures the total remuneration to employees for work done. It includes wages and salaries, as well as employer contributions to social security and other such programs.
Gross operating surplus (GOS): It is the surplus due to owners of incorporated businesses. Often called profits, although only a subset of total costs are subtracted from gross output to calculate GOS.
Gross mixed income (GMI): It is the same measure as GOS, but for unincorporated businesses. This often includes most small businesses.

The sum of COE, GOS and GMI is called total factor income; it is the income of all of the factors of production in society. It measures the value of GDP at factor (basic) prices. The difference between basic prices and final prices (those used in the expenditure calculation) is the total taxes and subsidies that the government has levied or paid on that production. So adding taxes less subsidies on production and imports converts GDP at factor cost to GDP(I).

Market output is defined as that which is sold for "economically significant" prices; economically significant prices are "prices which have a significant influence on the amounts producers are willing to supply and purchasers wish to buy." An exception is that illegal goods and services are often excluded even if they are sold at economically significant prices (Australia and the United States exclude them).

This leaves non-market output. It is partly excluded and partly included. First, "natural processes without human involvment or direction" are excluded. Also, there must be a person or institution that owns or is entitled to compensation for the product. An example of what is included and excluded by these criteria is given by the United States' national accounts agency: "the growth of trees in an uncultivated forest is not included in production, but the harvesting of the trees from that forest is included."

Within the limits so far described, the boundary is further constricted by "functional considerations." The Australian Bureau for Statistics explains this: "The national accounts are primarily constructed to assist governments and others to make market-based macroeconomic policy decisions, including analysis of markets and factors affecting market performance, such as inflation and unemployment." Consequently, production that is, according to them, "relatively independent and isolated from markets," or "difficult to value in an economically meaningful way" [ie., difficult to put a price on] is excluded. Thus excluded are services provided by people to members of their own families free of charge, such as child rearing, meal preparation, cleaning, transportation, entertainment of family members, emotional support, care of the elderly.

Services which are generally included:

  • Goods and services provided by governments and non-profit organisations free of charge or for economically insignficant prices are included. The value of these goods and services is estimated as equal to their cost of production.
  • Goods and services produced for own-use by businesses are attempted to be included. An example of this kind of production would be a machine constructed by an engineering firm for use in its own plant.
  • Renovations and upkeep by an individual to a home that she owns and occupies are included. The value of the upkeep is estimated as the rent that she could charge for the home if she did not occupy it herself. This is the largest item of production for own use by an individual (as opposed to a business) that the compilers include in GDP.
  • Agricultural production for consumption by oneself or one's household is included.
  • Services (such as chequeing-account maintenance and services to borrowers) provided by banks and other financial institutions without charge or for a fee that does not reflect their full value have a value imputed to them by the compilers and are included. The financial institutions provide these services by giving the customer a less advantageous interest rate than they would if the services were absent; the value imputed to these services by the compilers is the difference between the interest rate of the account with the services and the interest rate of a similar account that does not have the services. 
3)Value Added Method

Usually in this approach the producer units of an economy are classified into classes of industries: agriculture, construction, manufacturing, etc. Their outputs are estimated largely on the basis of surveys which businesses fill out, but also the services from dwellings owned by households are counted towards production. To avoid "double-counting" in cases where the output of a producer unit is not a final good or service, but serves as intermediate input into another producer unit, either only final goods and services outputs must be counted, or a "value added" approach must be taken, where what is counted is not the total value output of a producer unit, but its value added: the difference between the value of its gross output and the value of its intermediate consumption. 

Gross Value Added (GVA) = Sum of gross value added by all producer units = Gross output - intermediate consumption of goods and services to produce the output.

Depending on how gross value added has been calculated, it may be necessary to make an adjustment to it before it can be considered equal to GDP. This is because GDP is the market value of goods and services – the price paid by the customer – but the price received by the producer may be different than this if the government taxes or subsidises the product. For example, if there is a sales tax:

Producer's price + sales tax = market price

If taxes and subsidies have not already been computed as part of GVA, we must compute GDP as:

GDP = GVA + Taxes on products - Subsidies on products
The notes provided here are far from perfect. Please feel free to use the comments section to inform me about any additions or omissions that you may deem necessary.

A big thank you to wikipedia.
Gujarat with an area of 1,96,024 sq.kms occupies the 7th rank in India. If the soil of Gujarat is studied from the geological point of view one finds that there are two main areas in Gujarat: the western boundary of Saurashtra peninsula and alluvial plains of North Gujarat. If these two areas are excluded then we find that Gujarat is made up of hills of volcanoes. There is a large area of alluvial fertile land in the state, the reason for it being rivers having roots in other states flowing into Gujarat bringing in a lot of alluvium. This is very benificial for the agricultural sector in the state. 

Problem of Saline Land
The problem of Saline land is not only found in Central Gujarat and the coastal areas of Kachchh but also in other areas. The main reason for spread of salts in the land is that as most of the rivers of Saurashtra and North Gujarat areas are not perennial rivers, water is not recharged. Moreover, as more quantity of underground salt is absorbed, according to one estimate, salty water of sea has spread to about 1,65,000 hectares. As a result about 13 lakh farmers are adversely affected. Due to spread of salts in the land, more than 800 villages of the state are affected. The farmers of Gujarat are incurring huge financial losses due to damage to crops. In these circumstances, there have been successful attempts to bring up the water levels through check dams, due to which spread of salt in the land will be prevented and targets of agricultural production will be achieved.

The area of Gujarat under forest cover (7.46% in 2007) is substantially lower than the area under forest cover in the rest of the country (21.02%). The densest forest coverage in Gujarat is found in the Dangs district (80.42%) and the lowest in Rajkot (1.32%).
The main forest products are wood used in building works and wood for fuel, while the sub products are mangoes, seeds of karinji, fruits like Jambu, grass, bamboos, gum, honey, Aritha, Amla, timru leaves, oil seeds etc.

Geologically Gujarat can be divided into two main regions: main land and peninsula. Accordingly, the rivers flowing in the state are: 

Main rivers: Sabarmati, Narmada, Tapi, Mahi. These are perennial rivers and meet the Gulf of Khambhat.
Other Rivers: Banas, Kolak, Saraswati, Rupen Par, Damanganga, Auranga, Poorna Ambika, Kim, Dhadhar, Mindhola, Khari, Vatrak, Vishwamitri, Meshwa etc.

Peninsula (Saurashtra and Kachchh)
Rivers flow near the hills of Thanga, Mandav and Sardhar.
Rivers like Shetrunji, Bhadar, Aji, Demi, Machchhu, Ojat, Bhogavo, Kalubhar, Ghelo, Saraswati, Khari, Rangholi etc.

The rivers flowing in peninsula are small, shipping is not possible in them. These rivers flow either towards the Arabian sea or the Gulf of Khambhat or the Desert of Kutch. During the monsoon these rivers are full of water while there is a severe shortage of water during the summer.
Coordinates: 20.1° and 24.7°N Latitudes
                    68.4° and 74.4°E Longtitudes
To the north-west: International Border with Pakistan
To the west: The Arabian Sea
To the south/south-west: Maharashtra
To the east: Madhya Pradesh
To the north: Rajasthan

Natural Regions of Gujarat
The natural regions of Gujarat can be divided into two broad areas:
  1. Mainland Gujarat
  2. Peninsula
The Mainland consists of:
  • North Gujarat
  • Central Gujarat
  • Plains of South Gujarat
And the Peninsula consists of:
  • High Lands
  • Interior Plains
  • Coastal Saurashtra
There are three types of Mainland Gujarat: North Gujarat, Central Gujarat and the Plains of South Gujarat which are spread in the valley regions of Narmada, Mahi and Tapi rivers. These rivers flow from east to west and meet the Gulf of Khambhatt.
In the north-eastern region of mainland Gujarat, there are the Aravalli mountain regions, with heights of about 150 to 319 meters. These regions are spread up to the Narmada river in the south.
In the eastern side of mainland Gujarat, there are the Saputara mountain ranges, which have heights between150 and 243 mts. These regions separate Gujarat from the western Khandesh of Maharashtra and divides Narmada and Tapi into two parts. Tapi, Mahi, Sabarmati and Narmada rivers flow through the alluvial plains of these mountain ranges. The alluvial plains are fragmented by small plateaus, four big rivers, the mountains and hills. 
Peninsular Gujarat can be divided into three parts: 1. High Lands, 2. Interior Plains and 3. Coastal Saurashtra Regions. In the central high lands, rivers Machhu, Shetrunji, Bhadar flow towards the Arabian Sea or the Gulf of Khambhatt. In the Northern part of Saurashtrathere are muddy plains which have come into existence due to the sea and also large areas of saline land.
A region is a medium scale area of land or water which can be differentiated on the basis of physical, human or functional characteristics.
  1. Physical characteristics: This includes factors such as forest, cover, mineral resources, climate etc.
  2. Human characteristics: Regions defined on the basis of human characteristics include historical regions, tourism regions, religious regions etc.
  3. Functional characteristics: Regions in this category are linked by commuting patterns, trade flows, newspaper circulations, television and radio broadcasts etc.
Why Regional Economics?
As regions differ so do the problems of every region. Regional economics came into existence to enable us to plan in terms of a specific region. The various fields that regional economists enquire into are:
  • The determinants of industrial location. (Both within the nation and within the region.)
  • The regional economic impact of the arrival or departure of a firm.
  • The determinants of internal migration patterns and land use change.
  • Regional specialization.
  • Environmental impact of social and economic change.
  • Geographic association of social and economic conditions.
The notes provided here are far from perfect. Please feel free to use the comments section to inform me about any additions or omissions that you may deem necessary. 
Probably the most awesome thing, I've seen a home computer do. An absolute must watch. It also confirms my belief that awe inspiring photography is becoming increasingly common. And photoshop is to be thanked for much of that.

Today was the last day of our examinations. It was a tiring week for all of us; very little sleep, skipped lunches and  diabolical university exam timings conspired to ensure that we were one day away from dead.

But nobody really wanted to go home and we decided to stay at the college as long as the chowkidar allowed us to. Thats when this acquaintance of ours walks up to us with somebody who can be best described as  a tanned version of Yuvraj Singh. As I don't remember his name, we will stick to calling him Yuvraj. So, Yuvraj  asked whether we were interested in watching the next IPL match at Ahmedabad. He said he would provide us free entry and guaranteed that we would be stationed close to the pavillion. He even offered us free food. The only condition was that  we had to do wear the uniforms that will be provided to us and cheer wildly for the team whose uniform we were sporting. Would've loved to go. Free food + Free cricket is not a combo you can easily beat, but other plans were already made for the day and we had to refuse. We offered him chai and he sat down to talk with us. He later revealed that he had been delegated the task of collecting 50 players: 25 for the Rajasthan Royals and 25 for Chennai. He said he had no clue why the teams were doing this. But then it was good money and he was not the type to bother asking too many questions.

But i still wonder why the teams had to resort to tactics like these. From what I can see on T.V, the IPL seems to be a roaring success. All the stadiums seem to be packed. The only reason i could think of is probably little to no sale of team merchandise. Allegiances have been formed between fans and franchisees but loyalty still has some way to go. So, maybe the organizers feel that people will eventually start buying these uniforms when they get the impression that most people show up at venues wearing these team uniforms. Also notice how the cameramen seem to focus on people who show up in the uniforms. This may be at the behest of the team owners.

Image via Wikipedia

I always felt the world of things visible to the naked eye was impervious to the assault on common sense that most of quantum mechanics is. But, no more, the first paragraph of the article says it all:
A team of scientists has succeeded in putting an object large enough to be visible to the naked eye into a mixed quantum state of moving and not moving.
The nature.com article is rather poorly written. Here is a much better version.
Maybe this is why he holds the world record for the most number of catches. Also remarkable is the level of athleticism that he shows after almost 15 years in cricket.

I had been looking for this at quite a few places but it didn't appear early enough in my search results. Am attaching a link to the file for anybody who is interested. Click here to download it.
This video is cool enough to bring the gangster stache back into fashion. A must watch for all econ geeks.

Don't know much about the personal lives of either Hayek or Keynes but i wonder how much of an influence personality had in determining the popularity of their theories.