MADRID (ILO News) - Eliminating child labour in Latin America within the next 20 years could generate an estimated US$340 billion in economic benefit as a result of children's improved access to universal education and better health care, according to a new study ( Note 1) by the International Labour Office (ILO).
The study prepared by the ILO's International Programme on the Elimination of Child Labour (IPEC), says the benefits will vastly outweigh the costs of eliminating child labour, estimated at about US$105 billion to be invested between 2006 and 2025. This would result in a net economic benefit of some US$ 235 billion, the ILO study said.
The study, is based on data from 19 countries in the region where an estimated 19.7 million children aged 5 to 17 current work as child labourers, including Argentina, Belize, Bolivia, Brazil, Colombia, Costa Rica, Chile, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, the Dominican Republic, Uruguay and Venezuela.
The study uses the same methodology as a previous analysis entitled ( Note 2), Investing in Every Child, An Economic Study of the Costs and Benefits of Eliminating Child Labour, issued by the ILO in 2004. The cost-benefit analysis was carried out to examine the economic implications of implementing two ILO Conventions on child labour (No. 138 on minimum age and 182 on the worst forms of child labour.)
The original call for an analysis of the cost of eliminating child labour in Latin America came from the VIth Iberoamerican Ministerial Meeting of Ministers and high-level government representatives in charge of children and youth last year in San José, Costa Rica. It draws on four similar and complementary studies on Central America and the Dominican Republic, the Southern Cone, and Andean countries (the latter three in publication) by the ILO-IPEC Subregional Programme for Central America, Panama, the Dominican Republic, Haiti and Mexico as well as the regional synthesis report.
"The net economic benefits of eliminating child labour are positive and quite significant," said ILO Central America office Director, Gerardina González. "Even if we only take economic criteria into account, we can say that it pays. The results obtained will be a core element for promoting social policies and programmes"
Calculating the costs and benefits
The study simulates the elimination of child labour over the next 20 years, including the eradication of its worst forms within the first 10 years, through the improvement of educational programs at an estimated cost of US$56.5 billion and direct interventions in the case of the worst forms of child labour estimated at US$14.9 billion.
Furthermore, the study foresees a US$ 28.5 billion investment to compensate costs for supporting households. It proposes an income transfer programme for boys and girls living in households hit by extreme poverty that commit to sending their children to school. The child benefit would transfer 80 per cent of the value of a child's labour to these households. The administrative costs of such a programme would be around 5 per cent.
The study also factors in the benefits for education and health. Estimates are based on the value of US$ Purchasing Power Parities (PPP) providing a homogenous US$ value in relation to the dollar's purchasing power in the 19 countries analyzed.
The study defines as economic benefits those that stem from a better-educated, healthier population and increased productivity. In the case of education, the ILO estimated the direct net cash benefit at US$339 billion over 20 years, while health improvements are estimated to represent an economic value of US$2.1 billion
The ILO estimates that some 246 million children are currently involved in child labour worldwide. Of these, 179 million are exposed to the worst forms of child labour, which endanger their physical, mental or moral well being. National and regional programmes on child labour have flourished under the ILO's IPEC programme which began with six participating countries in 1992 with a single donor government, and has expanded to include operations in 80 countries funded by 30 donors.
Note 2 - Investing in Every Child. An Economic Study of the Costs and Benefits of Eliminating Child Labour, ILO Geneva, December 2003, ISBN 92-2-115419-X. www.ilo.org/public/english/standards/ipec/publ/download/2003_12_investingchild.pdf