Economics 286W
Honors Seminar
Spring 2004
Wednesdays, 2-4
Koons Hall 311
R. N. Langlois
322 Monteith X63472
Office hours MW 9-12 and 1-2 or by appointment
Assignment 3
For our next presentation, Christian Zimmermann will lead a discussion on a most interesting topic – child labor in developing countries. Christian and a coauthor have written a paper analyzing the following idea: the existence of child labor in Third World countries constitutes a negative externality to citizens of developed countries. This may be so because wealthy citizens have preferences and attitudes that see child labor as detestable and horrific, and the knowledge that such practices exist – albeit invisibly to them in far-away countries – lowers their utility and makes them worse off. Thus, it has been proposed, citizens of wealthy countries could bribe citizens of poor countries not to engage in child labor – and thus make both sides better off (what economists call a Pareto improvement).
Your job is to analyze this idea. Is this the right way to think about child labor and how to eliminate it? Are there better ways to think about it? As background, you should read Christian’s paper, along with a survey of the issues of child labor by a Cornell economist called Kaushik Basu. Both of these, along with a third paper that might interest you, are available on WebCT.
One tack you may choose to take – but need not necessarily take – is to examine the very idea of an “externality” in this context. In a famous paper, Guido Calabresi, formerly the dean of Yale Law School and now a federal appeals-court judge in New Haven, referred to this type of externality as a “moralism.” That paper is also on WebCT for your edification. If you choose to read the paper, you will also see that it makes a nice bridge between this talk and the previous one by Tom Miceli.
Due: March 17.
