The bigger picture
The road to hell is paved with good intentions. The world is full of policies that mean to do good but eventually end up doing harm.
A new paper by Prashant Bharadwaj, Leah K. Lakdawala and Nicholas Li on the impact of the Indian ban on child labour has attracted a lot of attention. The three economists show in their detailed analysis that child wages went down and child labour increased after the passage of the Child Labour (Prohibition and Regulation) Act of 1986. Poor households were worse off in terms of calorie intake, asset ownership and expenditure.
The point is not that India should turn a blind eye to the problem of child labour. No civilized country should. The point is that lawmakers need to understand how incentives operate on the ground—and the broader impact of any social policy.
The same problem can be seen in similar legislation such as the right to food. It gives its supporters a halo while allowing them to ignore the deeper impact of policy on the people it is meant to benefit.
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