Trade liberalization and child labor in selected SAARC and ASEAN countries

Bilal, Tariq (2016) Trade liberalization and child labor in selected SAARC and ASEAN countries. PhD thesis, Universiti Malaysia Sarawak.

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Abstract

Child labor is a stubborn problem for South Asian Association for Regional Cooperation (SAARC) and Association of South East Asian Nations (ASEAN), which seems to be declining. In recent years, the trade openness has raised the response towards the problem of child labor in these adjacent regions, because of an additional influx of trade of differentiated products. Trade of differentiated products is a significant source of trade between developing countries and needed to be examined with regard to child labor. Existing studies tended to investigate the nexus between the trade and child labor in traditional trade theory setting and the results show mixed evidence across countries. Hence, it would be interesting for this research to embark upon the issue of new trade theory by demonstrating the trade effects of differentiated products on the child labor. Apart from that, it would be appealing to investigate the impact of free trade on the child labor in the major SAARC countries, namely, Bangladesh, India, Pakistan, Nepal, and Sri Lanka and selected ASEAN countries, namely, Cambodia, Indonesia, Philippine, and Thailand, which are known to have a relatively high number of child labor. Empirically, this research assesses the theoretical treatment of child labor and trade related effects by employing selection, scale and technique variables. The panel data method is employed to justify the spatial and temporal dimensions of the research. The estimation procedure of this dissertation consists of three main steps. In the first step, an exposure assessment of the simple model by capturing selection, scale and technique effects obtained for the child labor in closed economy case. In the second step, a variable of trade combined with selection, scale and technique effects variables to find the effect of a change in trade on child labor. Subsequently, the third step presents trade interactions to check the trade-induced effects across the selected SAARC and ASEAN countries. The findings in this research confirm the importance of selection, scale and technique effects in the estimation of the full impact of international trade on child labor. Finally, this research proposes that the trade induced child labor effects can be worthwhile to address the underlying economies that gives a rise to offend child labor practices. The findings of this study recommends better policies to overcome the problem of child labor in the context of open economy and closed economy.

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