Informality and Institutional Change in Child Labour: An Indian Case Study

Economic informality inhibits the effectiveness of government regulation ofchildren’s working conditions. The informal sector is huge in India (86% of employment) and creates local downward pressure on wages in certain sectors. Partly as a result, voice at work is very restricted for many working children in India. The construction and quarrying industries utilize child labour, as do hotel and domestic services, and the tobacco, wood, and garment industries. We measure the scale of the problem across diverse industries, as recorded in India’s National Sample Survey. Statistical controls for education and income show that the informal sector and tradeable goods industries have more child labour than elsewhere. Implications for anti-child labour initiatives are summarized by way ofconclusions. This review arises from existing work funded by the Economic & Social Research Council as part of the Unfree Labour Research Group (2007-9). Mechanisms of institutional change which could mitigate the impact of the economy on fairness at work have to operate through the informal sector. A growing danger is that during any recession the return of circulatory migrant labour to villages will tend to increase the oversupply of less skilled rural labour. The informality of casual labour exacerbates the problem of exploitation. Answers lie in the initiatives surveyed in this paper but also in structural change to assure access to land and benefits to support parents of vulnerable children. The paper includes a discussion of three recent strategies to reduce child labour, noting that the association of child labour with informality and with tradeable goods production has implications for how best we examine these policies. A political economy approach is recommended.