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Child Labor
Subject Comparative statics, pay discrimination
Topic Labor Markets
Key Words Spending money, employment, rewards, budgeting, saving
News Story

In the UK, spending money for children has become big business. A fifth of them now receive up to $1,800 for doing basic household chores. Cleaning the car is the best-paid chore at $3 a wash, with 13 percent offering $7.50.

A survey of 702 households has revealed that 40 percent of children do considerably less around the house than their parents had done as children. More than half of those under 16 do not make their own beds, and one-fifth would not make their own beds unless paid to do so. Similarly, while setting the table is the most common chore, one-fifth would not do it unless paid.

Boys are paid more than girls for eight out of nine tasks. The biggest difference is for unloading the dishwasher, for which boys are paid $7.60 a week and girls $1.56. Girls are only paid more for general house cleaning: $4.42 a week compared to $3.29 for boys. The Equal Opportunities Commission chair says that parents appear to expect girls to do chores, while boys should be paid. She is concerned that such attitudes keep women poorer than men throughout their lives, and endorses underpayment in employment.

Parents could save themselves $750 a year by employing a cleaner for two hours per week. However, they feel that it is worth the money to teach their children that hard work brings its rewards, and also the processes of budgeting and saving.


(Updated June 15, 2002)

Questions
1.

Draw a labor supply and demand diagram of the market for household child labor.
a) Show the effect on the equilibrium spending money and employment of today's generation being less willing than their parents' generation to help around the home for free.
b) Bearing in mind the determinants of the supply of labor, what might have caused this change in willingness to work without payment?

2. On a second diagram, show two sets of supply and demand curves, one set for boys and one for girls, given that boys tend to be paid more than girls. Mark the pay differential between boys and girls.
a) Explain the pay differential in terms of economic factors that affect the supply and demand curves.
b) What non-economic forces could also help account for the sex differential?
3. Now draw a diagram of the demand for and supply of paid household labor in general. First, show the supply of child paid labor. Second, show the total supply of both child and adult hired help.
a) Illustrate how adding adult labor affects the total labor cost.
b) Under what conditions could the cost to parents decrease by hiring adult help as well as child labor?
Source Alexandra Frean, "Children pocket L1,200 for household chores," The Times, May 10, 2002.

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