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Estimating the economic incentives necessary for eliminating child labor in Ghanaian cocoa production

Author

Listed:
  • Jeff Luckstead
  • Francis Tsiboe
  • Lawton L Nalley
Abstract
Concerns about the use of child labor in West African cocoa production became widespread in the early 2000s in many high-income countries. In 2015 in Ghana, 91.8% (or a total of 878,595) of the children working in the cocoa sector were involved in a form of hazardous work. Child labor in cocoa production is not just a symptom of poverty but also a contributing factor, as children often forgo a formal education to work in cocoa orchards. Current Ghanaian law prohibits child labor, but, with many cocoa households living in poverty, child labor becomes a necessity for survival, and as such, current child labor laws are rarely enforced. Therefore, an effective policy that eliminates child labor could compensate farmers by providing an economic incentive. In this paper, we develop and calibrate a farm household model to estimate the cocoa price premium necessary to eliminate child labor from cocoa production while leaving the farm household welfare unchanged. This welfare-neutral price premium removes the negative effects of eliminating child labor for the farm household. Varying degrees of child labor exists, with certain forms posing a greater risk to children’s wellbeing. The results show that eliminating the worst forms of child labor would require a cocoa price premium of 2.81% and eliminating regular work (non-hazardous work but over the maximum hours allowed for a child) and the worst forms would require an 11.81% premium, which could be paid for by the well-established Ghanaian Cocoa Marketing Board. An incentive for the Cocoa Marketing Board to pay the price premium and monitor and enforce this policy would be the ability to differentiate their cocoa as child-labor free and not lose market share to countries who cannot currently certify this practice.

Suggested Citation

  • Jeff Luckstead & Francis Tsiboe & Lawton L Nalley, 2019. "Estimating the economic incentives necessary for eliminating child labor in Ghanaian cocoa production," PLOS ONE, Public Library of Science, vol. 14(6), pages 1-22, June.
    • Handle: RePEc:plo:pone00:0217230
    DOI: 10.1371/journal.pone.0217230
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    References listed on IDEAS

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    1. Isaac Koomson & Simplice A. Asongu, 2016. "Relative Contribution of Child Labour to Household Farm and Non-Farm Income in Ghana: Simulation with Child's Education," African Development Review, African Development Bank, vol. 28(1), pages 104-115, March.
    2. Gockowski, James & Afari-Sefa, Victor & Sarpong, Daniel Bruce & Osei-Asare, Yaw B. & Dziwornu, Ambrose K., 2011. "Increasing Income of Ghanaian Cocoa Farmers: Is Introduction of Fine Flavour Cocoa a Viable Alternative," Quarterly Journal of International Agriculture, Humboldt-Universitaat zu Berlin, vol. 50(2), pages 1-26.
    3. Pallage, Stephane & Zimmermann, Christian, 2007. "Buying out child labor," Journal of Macroeconomics, Elsevier, vol. 29(1), pages 75-90, March.
    4. Arnab K. Basu & Nancy H. Chau, 2003. "Targeting Child Labor in Debt Bondage: Evidence, Theory, and Policy Implications," The World Bank Economic Review, World Bank, vol. 17(2), pages 255-281, December.
    5. Francis Tsiboe & Bruce L. Dixon & Lawton L. Nalley & Jennie S. Popp & Jeff Luckstead, 2016. "Estimating the impact of farmer field schools in sub-Saharan Africa: the case of cocoa," Agricultural Economics, International Association of Agricultural Economists, vol. 47(3), pages 329-339, May.
    6. Oryoie, Ali Reza & Alwang, Jeffrey & Tideman, Nicolaus, 2017. "Child Labor and Household Land Holding: Theory and Empirical Evidence from Zimbabwe," World Development, Elsevier, vol. 100(C), pages 45-58.
    7. Sylvain E. Dessy & Stéphane Pallage, 2005. "A Theory of the Worst Forms of Child Labour," Economic Journal, Royal Economic Society, vol. 115(500), pages 68-87, January.
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    2. Sellare, Jorge, 2020. "New insights on the use of the Fairtrade social premium," GlobalFood Discussion Papers 304709, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    3. Anthony Orji & Jonathan E. Ogbuabor & Emmanuel Nwosu & Onyinye I. Anthony‐Orji & Nene Amoji, 2020. "Analysis of Poverty Correlates and Multi‐Dimensionality in South East Nigeria: New Empirical Evidence From Survey Data," Poverty & Public Policy, John Wiley & Sons, vol. 12(3), pages 255-270, September.
    4. Hotak, Nematullah & Kaneko, Shinji, 2022. "Fiscal illusion of the stated preferences of government officials regarding interministerial policy packages: A case study on child labor in Afghanistan," Economic Analysis and Policy, Elsevier, vol. 73(C), pages 285-298.
    5. Mahnaz Muhammad Ali & Mariam Abbas Soharwardi, 2022. "Economic Cost of Education and Behavior of Parents towards Child Labor," Journal of Economic Impact, Science Impact Publishers, vol. 4(1), pages 07-13.
    6. Boysen, Ole & Ferrari, Emanuele & Nechifor, Victor & Tillie, Pascal, 2023. "Earn a living? What the Côte d’Ivoire–Ghana cocoa living income differential might deliver on its promise," Food Policy, Elsevier, vol. 114(C).

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