Income-Child labour, urban inequalities, crime rates, Inverted-U theory


Child labour exists in varying degrees in virtually all countries aspiring to reach high income status. The prevalence of child labour and associated criminal activities have been portrayed in the 19th century novels of Charles Dickens, perhaps most vividly in the character ‘Fagin’ in the novel ‘Oliver Twist’. It seems clear that the early years of the industrial revolution in Britain gave rise to demand for increased child labour and also provided fertile ground for criminal activities. However, it is also evident from the experience of the high-income countries that the hallowed peaks of the development process witness an end to such activities representing the dark side of income creation. This paper examines whether there is a definite relationship between country income per capita and the prevalence of crime and child labour. The presumption is that as incomes grow there is an increase in the use of child labour as well as in crime, with a tapering- off after a certain income level. This paper presents evidence for such an inverted ‘U’ relationship between child labour and income per capita as well as between the crime index and income. These findings may also throw some light on the puzzle of the sudden fall in U.S crime rates in the 1990s.