Globalization and child labor are the two perimeters that are often linked together. Since globalization opens up new jobs in poor countries, as the foreign competitors strive to minimize their costs of production, many argue that this creates countless opportunities for the exploitation of children. Harsh working conditions, subjection to near-slavery, and even physically abusive treatment are some of the taglines that have made globalization into even a more controversial issue. However, as a byproduct of poverty, child labor has been long-standing and not exclusively caused by globalization. Faced with newly available jobs, the decision whether children will enter the workforce or acquire education is solely made by their parents. Hence, the reality is that the preferences of parents are the main determinants of the outcome.

According to Jagdish Bhagwati, the author of In Defense of Globalization, “poor parents, no less than rich parents, generally want the best for their children” (Bhagwati, 69). The claim that follows is that these types of parents will most likely put their children back in school rather than send them to work. As new jobs provide higher salaries, parents can feed the entire family and sustain normal living without the help of their children. Extra income that they now earn compensates for the earnings from the children’s work. Parents who highly value the goodwill of their children will also prefer education because their children will enjoy numerous benefits in the future as well. Therefore, the author’s claim that globalization accelerates the reduction of child labor and enhances primary school enrollment holds true for parents whose preferences fit into this category.

A potential disagreement with Bhagwati’s main claim may arise if one introduces a different group of parents, those that view their children’s education as an investment good. The author makes an assertion that even this group of parents will respond to increasing income by sending children to schools. The main aspect of the issue that the author fails to consider is the implication of the future job prospects. His first explanation of the argument he proposed is that the incentive to invest in children’s education should rise because educated workers will enjoy higher salaries, therefore indirectly creating a greater return to parents themselves. The fallacy of this argument is that it only holds true if returns on education are significant. Bhagwati assumes that future job prospects are strong which indeed makes education a “superior good.” However if a given country’s economy is weak and unstable, without guaranteed future job opportunities, parents are still more prone to send their children to work. In spite of being able to afford sending children to schools, parents will likely choose to put children to work because higher salaries will provide better living conditions in present times. Working children will help support the family and increased wages will outweigh the gains from education.

The second argument Bhagwati offers to support the claim that parents react to increasing income by sending children to school is the credit-constraint argument. This argument states that increased income can also enable poor parents who have been previously constrained from sending children to school by lack of access to credit to do so now. The reason why parents were previously unable to provide education for their children is because they could not borrow money to cover the cost of education and then repay the loans later. The growth of parental income results in the easing of the credit constraint. This, in turn, leads to greater school enrollment and hence reduced child labor. Again, Bhagwati’s reasoning only applies if future job prospects are bright. Only under this condition will education be a good investment for parents. In all other instances, parents are better off sending children to work and taking advantage of the extra income they bring to the household.

In relation to the easing of the credit constraint, the author leaves out another important implication. It is assumed that education is a commodity that is not easily affordable. However, Bhagwati never discusses education as being potentially free. Countries, such as China, where government pays for education, could not be included in the credit constraint argument. If education is free, then truly the only parameter that determines the likelihood of parents sending their children to school is the true value of education. If a struggling country is able to overcome difficulties and raise the standard of living, then the workers will be rewarded based on their level of education. This all ties back with the story of how the perception of future impacts the decisions parents make.

Globalization and child labor are often merged into a symbiotic relationship. Whether this relationship is valid or not, globalization does create jobs and raises income in poor countries. As new jobs are introduced, the demand for workers increases. A portion of these workers represents children whose likelihood of actually taking on these jobs depends on the choices that their parents make. Since choices are contingent upon preferences, parents will choose whether to send their children to work or not, based on what they prefer. If parents prefer goodwill of their children over their own potential gains from children, increase in income will cause these parents to send children to school. Parents more interested in gains that investing in education can bring, will send their children to school only if the gains from getting education outweigh the costs of not working. This, in turn, depends on the overall state of economy and whether or not the country is able to make significant economic progress.

Source: Bhagwati, Jagdish. In Defense of Globalization. 1st. New York: Oxford University Press, 2004.