Millions of children worldwide work in hazardous, poor conditions. The developed nations' strategy for combating child labor is to ban products produced by child labor. However, economist Kaushik Basu finds these bans worsen the plight of children. For example:

• Many poor families depend on their children's incomes and send their children to work out of need rather than malice.

• The United Nations Children's Fund found that 5,000-7,000 Nepalese girls moved from the carpet industry to prostitution as a result of such bans.

Another strategy proposed by developed nations is to raise the minimum wage. Basu says that raising the minimum wage in poor countries will encourage more children to drop out of school to work, since their guaranteed wage is higher.

Basu concludes that the primary problem with child labor is that jobs are menial and do not require a high level of skill in developing countries. Consequently, children make good substitutes for adults. Basu finds evidence that if an economy is trapped in this type of child labor trap, a concerted effort to educate one generation can help to break it.

Source: "Cause, Consequence, and Cure of Child Labor," Economic Intuition, Winter 2000. Based on Kaushik Basu, "Child Labor: Cause, Consequence, and Cure," Journal of Economic Literature, September 1999; Kaushik Basu, "International Labor Standards and Child Labor," Challenge, September-October 1999; and Kaushik Basu, "The Intriguing Relationship Between Adult Minimum Wage and Child Labor," Economic Journal, March 2000.