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Mortality risks and child labor

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  • ESTEVAN, Fernanda
  • BALAND, Jean-Marie

Abstract

In this paper, we investigate the role of young adult mortality on child labor and educational decisions. We show that, in the absence of appropriate insurance mechanisms, the level of child labor is inefficient. It may be too high if parents are not very altruistic and anticipate positive transfers from their children in the future, but it can also be too low, in particular when parents expect to make positive transfers to their children in the future. Imperfect capital markets unambiguously increase the equilibrium level of child labor. We also show that a cash transfer conditional on child's schooling can always restore efficiency regarding child labor.

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Bibliographic Info

Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2005049.

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Date of creation: 00 Jul 2005
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Handle: RePEc:cor:louvco:2005049

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  1. Levhari, David & Weiss, Yoram, 1974. "The Effect of Risk on the Investment in Human Capital," American Economic Review, American Economic Association, vol. 64(6), pages 950-63, December.
  2. Pouliot, William, 2006. "Introducing uncertainty into Baland and Robinson's model of child labour," Journal of Development Economics, Elsevier, vol. 79(1), pages 264-272, February.
  3. Holger Strulik, 2004. "Child mortality, child labour and economic development," Economic Journal, Royal Economic Society, vol. 114(497), pages 547-568, 07.
  4. Razin, Assaf, 1976. "Lifetime Uncertainty, Human Capital and Physical Capital," Economic Inquiry, Western Economic Association International, vol. 14(3), pages 439-48, September.
  5. Ravallion, Martin & Wodon, Quentin, 1999. "Does child labor displace schooling? - evidence on behavioral responses to an enrollment subsidy," Policy Research Working Paper Series 2116, The World Bank.
  6. Basu, Kaushik & Van, Pham Hoang, 1998. "The Economics of Child Labor," American Economic Review, American Economic Association, vol. 88(3), pages 412-27, June.
  7. George Psacharopoulos, 1997. "Child labor versus educational attainment Some evidence from Latin America," Journal of Population Economics, Springer, vol. 10(4), pages 377-386.
  8. Eric V. Edmonds, 2004. "Does Illiquidity Alter Child Labor and Schooling Decisions? Evidence from Household Responses to Anticipated Cash Transfers in South Africa," NBER Working Papers 10265, National Bureau of Economic Research, Inc.
  9. Jean-Marie Baland & James A. Robinson, 2000. "Is Child Labor Inefficient?," Journal of Political Economy, University of Chicago Press, vol. 108(4), pages 663-679, August.
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