The Hindu Business Line : `Investing in every child'

THE Geneva-headquartered International Labour Office, which is doing exemplary work to combat worldwide the menace of child labour, has come out with a publication examining the economic costs and benefits of the programme, its overriding conclusion being that, by 2020, the costs would be "far outweighed by the returns, leaving annual benefits of around $60 billion". This is no doubt a happy thought because, in many minds, a recurrent theme has been the economic justification of the final impact of the campaign, which the ILO is implementing through IPEC (International Programme on the Elimination of Child Labour). But how has the ILO study — the first integrated analysis of the economic costs and benefits of eliminating child labour to be conducted worldwide — gone about its work? Specifically, what are the cost elements that have been considered? How have the benefits been computed?

As the executive summary of the report outlines, the three broad cost spheres have been demarcated, the first being what the report describes as "education supply". The importance of the subject should be clear from the fact that the campaign to control the scourge of child labour is closely related to the provision of education opportunities for the "displaced" children, the argument being that children who are prevented from continuing in their old, debilitating theatre of activity would spend their time at school, preparing themselves for a life ahead which would be full of promise and potential.

According to the report, the "education supply" component comprises "an expansion of school capacity and an upgrading of school quality in conformity with ILO Convention No. 138, which envisions education as the principal activity for children up to the age of 14". To quote, the study estimated both the capital (building construction) and recurrent costs of making this education available to all children not currently attending, while making allowances for changes in the child population.

As far as the goals to be attained on "education supply", the study aimed at the provision of universal primary education by 2015 and universal lower secondary education by 2020 — goals which have already been accepted by the international community through the UN's Millennium Development Goals. Taking note of this dovetailing of child labour-campaign goals with the larger targets which already figure on the radar of the world community, the study says that the education aspects of "child labour elimination" actually build on "already-existing objectives", the implication of this on final costs being "far less" than what the total figures suggest. According to the study, child labour can be eliminated and replaced by universal education by 2020 at an estimated cost of $760 billion.

The second cost component of the IPEC programme is "income transfers", that is, "the institution of income-transfer programmes in each country to defray the cost to households of transferring children from work to school".

Explaining further, the report says that these programmes would target all poverty-bound families with school-going children, and would provide benefits according to a formula taking into account the average value of children's work, the number of children per household, and the degree of the household's poverty.

The third component is "non-school interventions", described as "a programme of interventions aiming at the urgent elimination of the worst forms of child labour, in conformity with ILO Convention No. 182". This is an important part of the current phase of the ILO's work to combat child labour, the sole objective being to get at the worst forms of the exploitation of children in a focussed way while the larger and more time-consuming effort makes headway more slowly across the world.

According to the study, these interventionist programmes would "remove and, if necessary, rehabilitate children in the unconditional worst forms, such as bonded labour and prostitution, as well as those engaged in hazardous work".

The effort would also target socially excluded children, including refugees and those from lower castes". As opposed to the three cost elements, the study lists two principal benefit areas — the added productive capacity future generations of workers would enjoy because of their better education attainments in their formative years, and the "economic gains anticipated from improved health due to the elimination of the worst forms of child labour". Other benefits like "enhanced opportunities for personal development and social inclusion" have not been considered by the study because of the inability to quantify their economic contribution.

As far as education is concerned, the study considers only the benefit accruing from longer years at school instead of better quality of learning at school on the ground that "our measures of quality are highly imprecise, and because there is little international evidence on the economic returns to quality".

The study concludes that the benefits of eliminating child labour would be nearly seven times greater than costs, or an estimated $5.1 trillion in the developing and transitional economies where most child labourers are found. In Asia the benefit-cost ratio would be 7.2:1, in Latin America 5.3:1, in North Africa and West Asia 8.4:1 (the highest), and in Sub-Saharan Africa it would be 5.2:1, the lowest. These figures suggest a degree of accuracy which may not be reflective of reality.

Nevertheless, the point is made that "the gap between benefits and costs is so great that it is sure to withstand reasonable adjustments that might be made to its methodology".

As with most international programmes of this sort, the fundamental issue relates to the scraping together of the huge investment required, especially so in view of the fact that the resultant benefits are expected to accrue "40 years past that point". There is little doubt that international interest in combating child labour has increased significantly during the past three or four years, as indicated by the ratifications of the relevant ILO Conventions.

Even so, as the study itself admits, finding funds for the child labour eradication programme "is primarily a political rather than economic question", which introduces unknown variables into the effort which could have unpredictable — some even unwanted — consequences.

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