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Study on the relationship between imports and children labor rate

Class: Analysis of International Political Economy
Hyewon Kwon
May 3, 2023

Abstract

This research delves into the intricate interplay between imports of goods and services and child labor rates in developing countries within the broader context of assessing the impact of international trade and foreign direct investment (FDI) on labor rights and working conditions in these nations. Employing a dataset encompassing 200 observations from 77 diverse countries, this study employs rigorous regression analysis to scrutinize the potential association between imports and child labor while considering the crucial variable of infant mortality rate.
The initial findings reveal a statistically significant inverse relationship, suggesting that higher imports are linked to lower child labor rates. However, introducing the infant mortality rate as a control variable attenuates this relationship, rendering it statistically insignificant. These results illuminate the multifaceted nature of the factors influencing child labor rates in developing countries. Therefore, this study not only underscores the issue's complexity but also emphasizes the necessity for additional research that considers a comprehensive spectrum of determinants to gain a deeper understanding of this critical concern.

Datasets

The dataset utilized in this study was meticulously curated, comprising 200 observations drawn from 77 countries. This dataset was sourced from credible repositories such as THE WORLD BANK, UNICEF, WHO, and the UN DESA Population Division to construct this dataset. Specifically, the following variables were employed in the analysis:
  • Imports of Goods and Services: This variable represents the value of all goods and market services received from international sources, expressed as a percentage of the Gross Domestic Product (GDP). Data for this variable was initially collected from WORLD BANK national accounts data and OECD National Accounts data files.
  • Child Labor Rate: This dependent variable quantifies the percentage of children aged between 7 and 14 who were engaged in economic activities for at least one hour during the reference week of the survey. The data for this variable was derived from the Understanding Children's Work project, which amalgamated data from the International Labour Organization *(ILO), UNICEF, and the World Bank.
  • Infant Mortality Rate: To control for potential confounding factors, the infant mortality rate per 1,000 live births was integrated into the analysis. This data was an amalgamation from the UN Inter-agency Group for Child Mortality Estimation, a collaboration between UNICEF, WHO, World Bank, and UN DESA Population Division.

Modeling and Results

The primary objective of this study was to investigate the relationship between imports of goods and services and child labor rates in developing countries. To fulfill this objective, we employed a regression analysis approach. The key models used for analysis are summarized as follows:
  • Import and Child Labor Rate without Outliers model: We examined the association between imports of goods and services and child labor rates while excluding outliers from the analysis. The results from this model indicated a statistically significant negative coefficient for the Import Rate variable, suggesting that higher imports were associated with lower child labor rates. This indicates a minor decrease in child labor rates for each unit increase in the Import Rate.
  • Imports, Child Labor Rate, and Infant Mortality Rate without Outliers model: This model extended the analysis by including the control variable of Infant Mortality Rate to account for potential confounding factors. The coefficient for the Import Rate variable was rendered statistically insignificant when controlling for the Infant Mortality Rate, indicating that other unaccounted factors may influence the relationship between import rates and child labor rates. Infant Mortality Rate emerged as a statistically significant predictor of child labor rates, highlighting its importance in the analysis.

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