EEC, earnings and child labor: The effectiveness of schooling and labor laws

Accession to the European Economic Community (EEC) has led to changes for most countries that have joined the Union. One aspect of these changes is the obligation to accept European laws. With EEC accession in 1986, in an effort to promote schooling and reduce child labor, Portugal adopted a minimum compulsory schooling law of nine years replacing the old compulsory schooling law of six years. The new law was applied gradually for the batch entering first grade in 1986 and it was only fully applicable as these children reached the 9^thgrade in 1995. At the same time but in the labor sphere, the minimum age of work was increased from 14 to 16 years old in 1991. The EEC functioned as an external party imposing higher standards, but also when the standards were not implemented, pressed for enforcement.

At one of the most difficult moments in the Portuguese European experience, we intend to assess the benefits of legislative changes by looking at the impact on child labor and earnings of current Portuguese workers. Panel data analysis allows us to distinguish the effect of other potential determinants from the effect of these legislative changes. For that purpose, we propose to use a rich dataset based on trimester labor surveys conducted between 2003-2010. While we expect to find a positive impact of legislation, the crucial issue is the magnitude of such effects. Is the effect of announcing the law and setting the standard more important than effective applicability? How effective was the increase in minimum working age law when the corresponding school grade was still not compulsory? How effective is the imposition of laws by an external party, in this case the EEC? Is ownership of a law more important or, instead, determination and enforcement even if from an external party?

Keywords:European Union; legislation/regulations; child labor; schooling;

JEL code: F55; I24; I28; J82; J88; K31