The abolition of child labour in underdeveloped countries is often held to be practically infeasible because it would entail closure of the economic activities which exist only because of access to such labour. Abolition, therefore, would reduce the earnings of poor households whose survival strategies, in the context of adult unemployment, depend on incomes derived from the practice. This article examines the child labour-based industry of match production in India, which is concentrated in the Sivakasi-Sattur matchbelt of Tamil Nadu. It is argued that the abolition of child labour, while reducing the excessive trading margins and changing the irrational locational structure characterising this industry, would in fact result in higher earnings for adult workers. However, it could have adverse consequences for a section of workers, which can be addressed with appropriate state action.