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The Labor Demand (LD) Study

The Labor Demand Study was one of a series of studies conducted by ICF under the Carpet Project, a USDOL-funded project that commenced in 2007. The Carpet Project was designed to develop reliable, accurate, and valid data and information about the prevalence, working conditions, and demand for children's work and child labor in the handmade-carpet export industry in India, Nepal, and Pakistan. To accomplish its purpose, the project team designed and conducted four major quantitative research studies and a series of semi-structured qualitative research activities to orient the quantitative studies.

The Labor Demand Study was a longitudinal panel study of carpet-producing establishments in India, Nepal, and Pakistan. The study focused on employment decisions in the production stage of the carpet sector, the stage where carpets were knotted, tufted, or hand-loomed. The study focused on export-oriented hand-production and excluded machine-made carpets and floor coverings. Approximately 525 establishments that produced hand-made carpets were interviewed three times in India, Nepal, and Pakistan over a 15-month period (April 30, 2010 to July 19, 2011). Establishments included formal registered factories, informal factories, cottage sheds, and homes.

The purpose of collecting this panel survey was to document the volatility of carpet employment over time and to use the data to understand the underlying causes of child employment in the carpet sector. This Study was able to distinguish among theories of why employers used children (such as the poverty theory or the competitive markets hypothesis) by using econometric techniques to estimate the relationship among child employment and wages in the establishment's locality.

The total number of children under 18 employed in the hand-made carpet industry in India, Nepal, and Pakistan varied during the period of Study from a low of 26,266 to a high of 34,216. Approximately three-fourths of those employed children were in Pakistan. Results from the study varied across the 3 countries, however, when the data were combined for the region as a whole, the competitive markets hypothesis best described the employment of children in the carpet sector in the region.