Bolivia has lowered the legal working age to allow children to work from the age of 10 as long as they also attend school and are self-employed.
The law also permits 12-year-olds to be contracted to work for others. But they need parental authorisation.
Vice-President Alvaro Garcia Linera said the new legislation reflects the needs of Bolivia, one of the poorest countries in South America.
It also sets harsher punishment for violence against children.
The law sets a sentence of 30 years in jail for child homicide.
The measure, approved by Congress earlier this month, was signed into law by Garcia in the absence of President Evo Morales, who was travelling to Brazil, reports the BBC.
“President Evo [Morales] intervened to make sure we found a balance between the reality and the law, between rights and international treaties,” added Garcia.
More than 500,000 children already work to supplement the family income in Bolivia according to the United Nations Children’s Fund (UNICEF).
