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Does Child Labour Displace Schooling? Evidence on Behavioural Responses to an Enrollment Subsidy

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  • Ravallion, Martin
  • Wodon, Quentin

Abstract

It is often argued that child labour comes at the expense of schooling and so perpetuates poverty for children from poor families. To test this claim we study the effects on children's labour force participation and school enrollments of the pure school-price change induced by a targeted enrollment subsidy in rural Bangladesh. Our theoretical model predicts that the subsidy increases schooling, but its effect on child labour is ambiguous. Our empirical model indicates that the subsidy increased schooling by far more than it reduced child labour. Substitution effects helped protect current incomes from the higher school attendance induced by the subsidy.

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Bibliographic Info

Article provided by Royal Economic Society in its journal The Economic Journal.

Volume (Year): 110 (2000)
Issue (Month): 462 (March)
Pages: C158-75

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Handle: RePEc:ecj:econjl:v:110:y:2000:i:462:p:c158-75

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  1. Rosenzweig, Mark R, 1982. "Educational Subsidy, Agricultural Development, and Fertility Change," The Quarterly Journal of Economics, MIT Press, vol. 97(1), pages 67-88, February.
  2. Nardinelli, Clark, 1980. "Child Labor and the Factory Acts," The Journal of Economic History, Cambridge University Press, vol. 40(04), pages 739-755, December.
  3. Basu, Kaushik & Van, Pham Hoang, 1998. "The Economics of Child Labor," American Economic Review, American Economic Association, vol. 88(3), pages 412-27, June.
  4. Baland, J.M. & Robinson, J.A., 1998. "A Model of Child Labor," Papers 9803, Southern California - Department of Economics.
  5. Rivers, Douglas & Vuong, Quang H., 1988. "Limited information estimators and exogeneity tests for simultaneous probit models," Journal of Econometrics, Elsevier, vol. 39(3), pages 347-366, November.
  6. Smith, Richard J & Blundell, Richard W, 1986. "An Exogeneity Test for a Simultaneous Equation Tobit Model with an Application to Labor Supply," Econometrica, Econometric Society, vol. 54(3), pages 679-85, May.
  7. Jacoby, Hanan G & Skoufias, Emmanuel, 1997. "Risk, Financial Markets, and Human Capital in a Developing Country," Review of Economic Studies, Wiley Blackwell, vol. 64(3), pages 311-35, July.
  8. Grootaert, Christiaan & Kanbur, Ravi, 1995. "Child labor : a review," Policy Research Working Paper Series 1454, The World Bank.
  9. Swaminathan, Madhura, 1998. "Economic growth and the persistence of child labor: Evidence from an Indian city," World Development, Elsevier, vol. 26(8), pages 1513-1528, August.
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