Consumer boycott, household heterogeneity and child labor

Consumer boycott campaigns against goods that are produced using child labor are becoming increasingly popular. Yet there is still no consensus on which are the effects of such type of activism on child labor in developing countries. In fact, if some agreement is to be found in the recent economic literature, it is that the boycott does not reduce child labor. We contribute to this discussion presenting a simplemodel which shows that there are conditions under which a consumer boycott reduces child labor. We consider a small country two-factor economy populated by heterogeneous households. The boycott affects both the adult and the child labor markets. We show that the effects are heterogeneous and depend on household characteristics and on the income distribution. We derive the conditions under which the consumer boycott reduces child labor not only for nonpoor households but also for some of the households whose’ income is—before the boycott—under the subsistence level.