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Child Labor: The Role of Financial Development and Income Variability across Countries

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  • Dehejia, Rajeev H
  • Gatti, Roberta

Abstract

In this article, we examine the link between child labor and financial development using cross-country data. We show that child labor and financial development display a significant negative relationship, which is particularly strong in the sample of low-income countries and is robust for a wide range of specifications and estimators, including fixed-effects and instrumental variables. We identify a plausible channel through which financial development affects child labor, as we find that income variability has a sizable, positive impact on child labor in countries where financial markets are underdeveloped, although this is not the case when financial markets are developed. Our results suggest that policies aimed at widening access to credit could be effective in reducing the extent of child labor.

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Bibliographic Info

Article provided by University of Chicago Press in its journal Economic Development and Cultural Change.

Volume (Year): 53 (2005)
Issue (Month): 4 (July)
Pages: 913-32

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Handle: RePEc:ucp:ecdecc:y:2005:v:53:i:4:p:913-32

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Web page: http://www.journals.uchicago.edu/EDCC/

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Cited by:
  1. Asli Demirg��-Kunt & Ross Levine, 2009. "Finance and Inequality: Theory and Evidence," Annual Review of Financial Economics, Annual Reviews, Annual Reviews, vol. 1(1), pages 287-318, November.
  2. Christian Ebeke, 2011. "The power of Remittances on the Prevalence of Child Labor," Working Papers, HAL halshs-00554258, HAL.
  3. Hazarika, Gautam & Sarangi, Sudipta, 2005. "Household Access to Microcredit and Child Work in Rural Malawi," IZA Discussion Papers 1567, Institute for the Study of Labor (IZA).
  4. Alvi, Eskander & Dendir, Seife, 2011. "Weathering the Storms: Credit Receipt and Child Labor in the Aftermath of the Great Floods (1998) in Bangladesh," World Development, Elsevier, Elsevier, vol. 39(8), pages 1398-1409, August.
  5. Shimamura, Yasuharu & Lastarria-Cornhiel, Susana, 2010. "Credit Program Participation and Child Schooling in Rural Malawi," World Development, Elsevier, Elsevier, vol. 38(4), pages 567-580, April.
  6. Calero, C. & Bedi, A.S. & Sparrow, R.A., 2008. "Remittances, liquidity constraints and human capital investments in Ecuador," ISS Working Papers - General Series, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague 18735, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
  7. Karina Acevedo González & Raúl Quejada Pérez & Martha Yánez Contreras, 2011. "Determinantes y consecuencias del trabajo infantil: un análisis de la literatura," REVISTA FACULTAD DE CIENCIAS ECONÓMICAS, UNIVERSIDAD MILITAR NUEVA GRANADA, UNIVERSIDAD MILITAR NUEVA GRANADA.
  8. repec:spo:wpecon:info:hdl:2441/6741 is not listed on IDEAS
  9. Jean-Paul Fitoussi & Francesco Saraceno, 2008. "The Intergenerational Content of Social Spending: Health Care and Sustainable Growth in China," Documents de Travail de l'OFCE, Observatoire Francais des Conjonctures Economiques (OFCE) 2008-27, Observatoire Francais des Conjonctures Economiques (OFCE).
  10. Delphine Boutin, 2011. "Envoi de fonds et allocation du temps des enfants au Niger : L’effet indirect des chocs négatifs," Larefi Working Papers, Larefi, Université Bordeaux 4 1105, Larefi, Université Bordeaux 4.
  11. Delphine Boutin, 2011. "Envoi de fonds et allocation du temps des enfants au Niger : L'effet indirect des chocs négatifs," Working Papers, HAL hal-00637607, HAL.
  12. repec:ebl:ecbull:v:30:y:2010:i:1:p:351-364 is not listed on IDEAS

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