For decades, a debate has raged over the true reason for Caillou's bald head on the small screen. A disproven yet persistent theory is that he's suffering from a form of cancer, and the treatment has led to extreme hair loss. This would explain why his parents seemingly give him everything he wants no matter how unruly he behaves — a common complaint from adult viewers that worry about their impressionable "Caillou"-watching children — but that's not the case. In reality, it has to do with the source material the character was adapted from.
According to the Chouette Publishing website, when Caillou came into being back in 1989, he was written and illustrated as a nine-month-old child. When he was aged up to four years old for his television series, adding a full head of hair made him completely unrecognizable. Therefore, the animators elected to leave his dome exposed as not to confuse kids. "Caillou's baldness may make him different, but we hope it helps children understand that being different isn't just okay, it's normal," the website reads, making this design choice a prompt that kids can learn from.
Additionally, the official Caillou website (via The Huffington Post) has noted that young viewers tend to overlook his hairlessness completely, so if it doesn't bother the target demographic, then it's the least of everyone's worries when it comes to "Caillou."