In developing countries, credit restrains and the high poverty levels contribute to incidences of child labor. Statistics indicate that nearly 100 to 200 million people, worldwide, under the age of 15 years are engaged in employment opportunities. Natural reactions are drawn towards the eliminations of this child labor practice; key being the need to ban the phenomenon as well as ban imported products out of child labor. It is important, however, to understand the economic factors that lead to the existence of child labor.
Despite the returns of education being higher than the returns of engaging in employment, parents still engage their children in working chances. This happens so because they cannot afford taking their children to school. According to Ranjan (1999), there are no credit facilities against the future earnings that would enable parents take their children to school. Lack of market for loans and poverty largely contribute to the practice of child labor.
Looking from another angle, the governments of the involved individuals have also failed to take responsibility of the welfare of their poverty-stricken citizens. This has also contributed to the existence of child labor. The families of the children taking part in child labor rely on them for the sustenance of their welfare.
Economically, child labor is less productive than unskilled adult labor. As such, the output from a child worker is less productive than that from an adult with no skills. It therefore translates that a given household would find it necessary to take their children to schools to acquire the needed skills. Poverty, however, has led to the lack of opportunities to take children to schools (Ranjan, 1997).
The lack of credit facilities, which would otherwise serve the purpose facilitating the education process, has also contributed to the existence of child labor. The lack of utility required in sending children to schools is contrariwise to the parental level income. As such, parents with low income will prefer to send their children to work as opposed to children from rich backgrounds who are most likely to be taken to schools. In such circumstances, it is justifiable to see the incapability of borrowing against future earnings as a reason for the existence of child labor.
Also, according to Ranjan (1999), credit facilities’ hindrance results to the existence of child labor. In one way or another, the inability to access funds contributes to the phenomenon of child labor. Child labor contributes to the survival of very many families with low income. The welfare of concerned family is sustained through the income of the child undertaking such employment. Income from the labor carried out by the child sustains the family. Further, products from the practice are still usable and merely less than one percent productive than products form the unskilled adult labor.
Majority of the households are deemed to suffer if the ban on products from child labor is enforced. The actualities of child labor should be perceived from an economic angle. In supporting economies of low-income countries, Canada and the United States of America should not ban imports that are produced from such economies. The imports sustain families and people who have no access to readily available flowing cash as well as borrowing facilities. To a great extend, doing so will be a way of providing means of livelihood and equal opportunities for the developing societies.
References
Ranjan, P. (1999). An economic analysis of child labor. Economics Letters, 64(1), 99-105.
