Child Labor and Responsible Consumers: From Boycotts to Social Labels, Illustrated by the Indian Hand-Knotted Carpet Industry

The basic strategy for the fight against child labor has been boycotting efforts followed by labeling practices. This article reviews the development of these practices and their impact on the hand-knotted carpet industry in India. The authors highlight the fact that though labeling has responded to many of the criticisms of boycotts, labeling too has shortcomings related to its trustworthiness in situations where information is highly asymmetrical among stakeholders. The labeling may lack credibility and, thus, arguably, has limited impact on the hand-knotted carpet industry. The article discusses why and how labeling may lack credibility. Since the article is a conceptual assessment and not an empirical study, it draws on other sources for relevant empirical information.