A new study of Vietnam has gathered evidence that globalized free trade may reduce child labor in developing companies. The Dartmouth College research found that, as summarized by CNN/Money:
In 1989, the Vietnamese government imposed a rice export quota that kept rice prices low relative to the global rice market. After that, however, it gradually began loosening restrictions until, in 1997, rice trade was fully liberalized and subject to global market prices. As a result, between 1993 and 1998, the price of Vietnamese rice jumped 29 percent.During that same period, the rate of Vietnamese children between the ages of 6 and 15 working at least seven hours a day fell to 38 percent in 1998 from 57 percent in 1993, according to the Vietnam Living Standards Survey of 4,000 households.
But higher rice prices couldn't have directly led to all the reduction in child labor in Vietnam, Edmonds and Pavcnik pointed out, since families in urban areas had to pay more for rice without getting any of the benefit from higher rice prices that rice-growing families enjoyed.
Adjusting for such factors, Edmonds and Pavcnik estimated that higher rice prices accounted for about 45 percent of the drop in child labor between 1993 and 1998 -- in other words, about 1 million of the 2.2 million children who stopped working during that time did so simply because of higher rice prices.
The full research paper is also available online at the National Bureau for Economic Research.
