We build up a simple overlapping generations’ model where parents derive utility from their children’s education and use this framework to understand and analyze the implications of a ban on exports with child labour content. Since perfect monitoring seems unrealistic, we develop a model with imperfect monitoring. The export industry is competitive and therefore zero-profit condition holds. The country under consideration is assumed to be a small open economy and therefore faces a fairly elastic demand. Then, a ban on child labour imposed by the importing countries will increase the cost of employing child labour and will discourage the producers in that sector to use child labour. The final effect on the incidence of child labour will however depend on whether the aggregate supply of unskilled labour by child workers in the pre-ban equilibrium situation is greater or less than the demand for unskilled labour in the import-competing sector.
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