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Working versus schooling: the impact of social expenditure

Author

Listed:
  • Christopher Grigoriou
  • Grégoire Rota-Graziosi

Abstract

We develop a theoretical model where child labour results from a household?s trade-off between sending a child to school or to work. Education is considered as a risky investment, since the survival of the child is not certain. We explore the effects of public expenditure on education and health on child labour, specifying a transmission mechanism for each kind of spending. On the one hand, we establish that health expenditure reduces child labour all the more as child mortality rate is high. On the other hand, a moderate aversion to risk is a necessary condition for education expenditure to reduce child labour. Our theoretical results are empirically validated on panel data from 66 developing countries between 1985 and 2000. JEL Classification: J20, K31, D60.

Suggested Citation

  • Christopher Grigoriou & Grégoire Rota-Graziosi, 2008. "Working versus schooling: the impact of social expenditure," Recherches économiques de Louvain, De Boeck Université, vol. 74(1), pages 33-52.
    • Handle: RePEc:cai:reldbu:rel_741_0033
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    Keywords

    child labour; education spending; health spending;
    All these keywords.

    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law
    • D60 - Microeconomics - - Welfare Economics - - - General

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