What is the purpose of these alternate labels? What effect do they have on the story?

I'm not sure of Lowry's intent, but the result is categorizing...... naming each thing precisely, so as to know exactly what it is, and where it belongs. Naming groups of children by age allows for specific expectations..... no one child should be a head, no child should be behind. A baby who wasn't developing according to schedule would be released, an elder person without a specific purpose would be released. A comfort toy could only be held while comforting was necessary.