Determining Factors Causing Child Labor By Using Multiple Linear And Logistic Regression Analysis

Research Paper (postgraduate), 2016

31 Pages




1. GDP ... 4
7. SLAVERY ... 7






SPSS Tables & statistical interpretation ... 14
Model 1 (linear regression) ... 14
Model 2 (Binary logistic Model) ... 22
Final model ... 24







Child labor is defined as the work that deprives children of their childhood, their dignity and potential, and that is harmful to physical and mental development (ILO, 2012).

An activity is called as child labor when it involves one of these characteristics in their work’s nature. These includes violation of a country’s minimum age laws, threatening children physically, mentally, or emotionally, involves intolerable abuse, such as child slavery, child trafficking, debt bondage, forced labor, or illicit activities, prevents children from going to school, uses children to undermine labor standards (Labor Center, UOI, 2011).

Child labor is a term which defines work that is mentally, physically, socially or morally dangerous and harmful to children and interferes with their schooling by: depriving them of the opportunity to attend school; obliging them to leave school prematurely; or requiring them to attempt to combine school attendance with excessively long and heavy work (ILO, 2012).

Children do many activities. Normal activities associated with them are schooling, playing, studying etc. All activities are not child labor like if children help their parent in home chores it’s not child labor, but child labor should be referred to those work and activities which are dangerous and hazardous to children’s health and development (ILO, 2012). But when children involve in working activities to earn money by force this is something which is not regarded as justice to the children. As it’s something which makes them act as an adult and their childhood and innocence gets lost, and their right to educate themselves also get violated which in the long run affects their lives to remain in poverty forever. So this child labor is considered as violence against children and not appreciated all over the world and meant to be elimination. But still it exists in huge numbers specifically in the least developed countries.

Child labor is such a phenomenon which prevails in most of the countries of the world. Its ratio of existence is higher in least developed countries, because the poverty ratio is higher there, literacy rate is lower, opportunities for employment and hence earnings are lesser in such countries that people are forced to put their children on labor work to help them in earning bread for their family. But all these factors like literacy rates, GDP, employment opportunities, and poverty are all such factors which are usually thought as causes of the child labor. But what do such variables when combines together have a causing effect to increase child labor? In this paper relationship of child labor has been studied with some pre-selected multiple factors which could cause child labor.


There could be numerous reasons for child labor to occur at any place. But it is difficult to study all the factors at one time. Most of the studies on child labor have studied it with a single factor or two. But in this study almost seven variables have been taken into account to investigate the relationship of these variables with child labor. That is how these factors affect child labor? Are these the causes to child labor occurring? These factors includes: GDP, FDI, labor force, literacy rate, social globalization, ease of doing business and slavery.

1. GDP

GDP is a key performance indicator of any economy. It measures the financial value of the goods and services produced in a country in a specific year and bought by the final consumer (IMF, 2012).

GDP of the country is used to measure a country’s economy’s worth. It shows that how much goods and services in a country have been produced and consumed per capita. Higher values of the GDP shows economy’s wellbeing while low value of GDP show low development of the economic development of the country. This is the primary and most important factor when analyzing a country’s economic health, its size and its development state. GDP is represented in total currency value like if a country’s currency is dollar then the total dollar value of all goods and services produced in country over a defined time period is called as GDP of the country.

The World Bank defines GDP as:

“GDP is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products. It is calculated without making deductions for depreciation of fabricated assets or for depletion and degradation of natural resources (World Bank, 014).”


FDI that refers to Foreign Direct Investment is another important factor which contributes towards an economy’s development. FDI is a form of financing from foreign countries which is considered to be a safe form of financing. Capital inflows are one the most important factor in an economy’s growth (Arias & Hausmann, 2000).

FDI is defined by the IMF as:

“An investment made to acquire lasting or long term interest in enterprises operating outside of the economy of the investor (Kolodkin, 2014).”

FDI has played important role in countries to make them developed China is the great example. FDI is one of the major sources of financing. If a country is not self-sufficient or have limited resources then FDI are the great source of financing gained by those countries which are not much developed as the donor country.

An investment by the companies usually occurs among the companies in other countries. FDI can be divided into further three categories. It includes horizontal, vertical and conglomerate. FDI is a great source of capital flow in a country especially for the developing ones.

FDI could be inward and outward. Inward FDI is the capital flow in a country while outward FDI is the capital flow from the country. For this study inward capital flows are taken into account.


Education plays a vital role in development of economy and the society. Education improves productivity of people and their health gets better and the poorest people gain the most (Hill & King, 1997).

Education is measured and termed as different indicators including literacy rates, enrollment and years in school, which always are low for women in developing countries (Hill & King, 1997). The fact that females are not encouraged in achieving qualification as males are; it also leads towards child labor because poverty will be there and females will remain bound to stay at home and do home chores so child labor can also be a consequence of gender inequality.

For this study education is taken as literacy rate. Literacy rate can be referred to as the basic ability to read and write. Literacy rate can be defined as:

“The percentage of people who are able to read and write” (Cambridge Dictionary, 2015).

The percentage of the population aged 15 and above who can, with understanding, read and writes a short, simple statement on their everyday life. Generally, ‘literacy’ also encompasses ‘numeracy’, the ability to make simple arithmetic calculations” ( World Bank, 2014).


Labor force of country is the most important driver of an economy which can make an economy develop and prosper. If a labor of a country is skilled and more people in the population are employed and form its labor force, then that country can develop and grow faster.

It can be defined as:

“The labor force participation rate is calculated as the labor force divided by the total working age population. This indicator is broken down by age group and it is measured as a percentage of each age group ( OECD, 2015).”

The labor force participation rate is the percentage of people who forms a workforce of a country from the total population of the country. If this rate is higher it depicts that many people are employed within the country and earning money hence their living standards are good, whereas if this ratio is low then it depicts that more number of people are unemployed in the country hence they have less chances to earn and they are bound to live in poverty, which can lead parents and children towards child labor.

The countries like UK, USA, Australia, which are very high human development countries the labor force participation rate is very high, whereas the countries like Nepal, Kenya, Pakistan, which are very low human development countries have low rates of labor force participation (HDR, 2014).


Globalization can be referred to the surging incorporation of production, development and communication among nations on an intercontinental scale.
It can be defined as:

“Globalization can be defined as the intensification of world-wide social relations which link distant localities in such a way that local happenings are shaped by events occurring many miles away and vice versa” (Giddens, 1990: 64).

Globalization can be divided in three categories: economic, political and social. While all factors are independent, social changes usually occur as an outcome of political and economic factors. Holistically, Social globalization encompasses subjects related to family, work, education, religion etc. within multicultural populace.


A business can be defined as a set of activities performed together to earn a profit, primarily. It can be defined as:

A business is an organization, involved in the trade of goods, services, or both to consumers” (Arthur and Shefrin, 2003).

Business as its name implies is a state of being busy to produce valuable work at societal level. Business’ major purpose is to produce and sell goods and services.


In this modern era, where every kingdom has been changed in a government owned state, where every person is treated as a citizen whose first and foremost right is “freedom”, it is believed that slavery does not exist now. It has been finished with the history. But the truth is something very opposite to this phenomenon.

Slavery can be defined as:

A system under which people are treated as a property to be bought and sold, and are forced to work” (Brace, 2004)

Slavery activities has been in practice by different societies of the world in the form of domestic servants, child labor, forced young marriages and such other activities, but officially slavery has been declared as illegal in all countries, but still slavery practices are going on in every part of the world on extreme to low levels, which accounts for 20 to 30 million slaves globally (Slavery’s Global Comeback, 2012).

There are different types of slavery, known as: i) chattel slavery, ii) bonded labor, iii) forced labor, iv) forced marriage.

Chattel slavery: As the name depicts chattel refers to the personal property that is why in chattel slavery people are bought and sold as commodities by their owners, this is the original and traditional form of slavery practiced hugely in the past.

Bonded labor: when a person pledges himself against a loan it is called a bonded labor (Bales, 2004).

Forced labor: forced labor refers to the individuals forced to work against his will due to some threat of punishment or any other form of violence, and is restricted for freedom. Human trafficking, women prostitution are kinds of forced labor (Voice of America, 2009).

Forced marriage: forced marriage is a form of marriage in which either one or both parties are being married without their consent.

In this modern era, slavery is also present in its modern form and referred as “Modern Slavery”. Whereas modern slavery includes slavery, slavery like practices (such as debt bondage, forced marriage and sale of exploitation of children), human trafficking and forced labor, and other practices described in key international treaties, voluntarily ratified by nearly every country in the world (Global Slavery Index, 2013).

According to the recent research 29.8 million people are living in modern slavery throughout the world.

There could be many reasons for slavery like if people are so poor in a country that they just want to live and earn bread for them, they do not have any wish in their lives, and if someone providing them with this basic need that is food, they will accept slavery. Another scenario, in countries like India and Pakistan where girls are bound to live with their parents or husbands, in such a case if a girl is lost or kidnapped or have been left alone, she will accept slavery most of the times to live in shelter.

Just like this if a family is very poor and family size is very large and parents are unable to provide food even. In that case sometimes parents force their children and sometimes children too start to work and stay as maids and servants which could be termed as a slavery form. These are some of the reasons which may be forced or formed by the cultural and societal values. But this is not true for each country of the world.

Modern slavery; has been divided into three sub variables and calculated enslaved number of people per country accordingly. These variables are:

i. Prevalence of modern slavery by population
ii. Child marriage
iii. Human trafficking

All these three types of slavery have been taken to build a global slavery index per country (Global Slavery Index, 2013).


What are the major causes of child labor in a country?


Research objectives for this study were:

- To find out factors causing child labor
- To measure the association among these factors and child labor
- To find out the most sensitive factor causing child labor the most.

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Determining Factors Causing Child Labor By Using Multiple Linear And Logistic Regression Analysis
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Aqsa Siddiqui (Author)Nausheen Shakeel (Author)Sahar Butt (Author), 2016, Determining Factors Causing Child Labor By Using Multiple Linear And Logistic Regression Analysis, Munich, GRIN Verlag,


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