ABSTRACT
The problem of child labour in a developing country can be viewed from two sides: demand and supply. It is the poor working families that supply child labour. On the other hand, the demand for child labour comes from the production units in the agricultural sector, low-skill informal manufacturing and services sectors. The developing countries resort to different poverty-eradication programs designed to increase the earning opportunities of the poor. These policies are expected to produce favourable effect on the incidence of child labour through the supply side of the problem. However, there is now ample empirical evidence suggesting that income prosperity may not always lead to less child labour.1 A relevant question is why policies that raise the earning opportunities of poor people may sometimes fail to control the poverty-induced child labour problem is perplexing. This calls for theoretical explanation that might be able to show why policy interventions affecting the supply side alone cannot effectively solve the prevalence of the evil in the system. It seems that policies should be designed in such a way so that both the demand and supply sides of the problem are taken care of.
