Globalisation, the process by which an increasing share of world production is traded
internationally, and the productive systems of different countries become increasingly
integrated, is credited with many merits and held responsible for many evils. The
present paper attempts to answer the following question: given that international trade
has major allocative and distributive implications, are children likely to be among the
losers? More specifically, given that child labour appears to be on the increase
worldwide, could this be a consequence of globalisation?
The current wave of globalisation started soon after the end of the second
world war, but got in its stride in the 1980s, as rapid progress in information and
transport technology compounded the effects of trade liberalisation (Krugman, 1995).
To try and understand the consequences of globalisation it thus seems reasonable to
look at what has happened over the last couple of decades. Much of the existing
literature on the subject is concerned with the consequences of globalisation for wages
and employment in the developed world (Wood, 1998). Since our concern is child
labour, and child labour is concentrated mainly in the developing world,2 we shall
focus on developing countries.
A useful source of cross-country information on child labour and international
trade are the World Bank's Development Indicators. Another valuable source of
information on trade openness is Sachs and Warner (1995), which classifies a country
as "open" if free from a number of obstacles to trade, from non-tariff barriers to state
monopoly on major exports. Combining these two sources of information, we
assembled a set of relevant data on all developing co ...