Yesterday I saw Gordon Tullock. This is the second time I met him. (The first time resulted in an insult within the first few minutes). The brown bag event resulted in a very interesting Q&A session with Tullock. 

When Tullock was asked what he thought to be his greatest contribution he said, “Teaching economists that they don’t have to stick to economics.”

Personally his work convinced me to not just stick to law and to study economics. For that, I shall be forever grateful.

My op-ed on the Supreme Court ruling on reservation for OBC was published in the Wall Street Journal Asia a few days ago. You can read it here (subscription not required). Also, on the same day an editorial was carried on the same subject. You can read that here.

Indian government has banned child labour. Again. For the third, or perhaps, the fourth time. Under the new ban more activities have been listed as hazardous for children.

Now if child labour was so simple a problem that it could be solved with a ban, we wouldn’t need four attempts. So what is really the cause of child labour? Don’t all parents want their children to be happy and free from employment?

There is a clear link between child labour and minimum wages. The minimum wage sets a standard high causing unemployment among adults forcing them to send their children to work. On the demand side, since no minimum wage is required for child labour, employers prefer to employ underage workers. Kaushik Basu has a far more eloquent explanation for the same.

Secondly, the alternative is to educate the child which is not a real option for most poor parents given the quality of government schools and the high fee of private schools. So the real challenge and solution is to create and incentive structure to attract parents and students to schools as opposed to sending them to work.

Schemes like the Mid-day meal and Akshaya Patra would have a far greater effect on reducing child labour than just banning it. These schemes make it cheaper for parents to send children to school since they provide at least one meal a day alongside providing education. Other schemes like providing students with bicycles in Tamil Nadu also help in increasing access to schools and reduce child labour.

The magic, as always, is in providing the right incentive structure and banning child labour merely changes the law and not the incentives.