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Mortality Risks, Education and Child Labour

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Author Info
Baland, Jean-Marie
Estevan, Fernanda

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Abstract

In this paper, we investigate the role of young adult mortality on child labour and educational decisions. We argue that mortality risks are a major source of risks in returns to education in developing countries. We show that, in the absence of appropriate insurance mechanisms, the level of child labour is inefficient, but it can be too high or too low. It is too high when parents are not very altruistic or anticipate positive transfers from their children in the future. Uncertain returns to education, endogenous mortality or imperfect capital markets unambiguously increase child labour. When the level of child labour is inefficiently high, we also show that a cash transfer conditional on child's schooling can always restore efficiency regarding child labour.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 5972.

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Date of creation: Dec 2006
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Handle: RePEc:cpr:ceprdp:5972

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Related research
Keywords: child labour conditional cash transfers education mortality risks old-age security motive

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Find related papers by JEL classification:
D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
I00 - Health, Education, and Welfare - - General - - - General
O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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  2. Blackorby, Charles & Bossert, Walter & Donaldson, David, 1995. "Intertemporal Population Ethics: Critical-Level Utilitarian Principles," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH.
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  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. Bedi, Arjun S. & Gaston, Noel, 1999. "Using variation in schooling availability to estimate educational returns for Honduras," Economics of Education Review, Elsevier, vol. 18(1), pages 107-116, February. [Downloadable!] (restricted)
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  6. Forslund, Anders & Nordström Skans, Oskar, 2006. "Swedish youth labour market policies revisited," Working Paper Series 2006:6, IFAU - Institute for Labour Market Policy Evaluation. [Downloadable!]
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  7. 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. [Downloadable!] (restricted)
  8. Edmonds, Eric V., 2006. "Child labor and schooling responses to anticipated income in South Africa," Journal of Development Economics, Elsevier, vol. 81(2), pages 386-414, December. [Downloadable!] (restricted)
  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. [Downloadable!] (restricted)
  10. Esther Duflo, 2001. "Schooling and Labor Market Consequences of School Construction in Indonesia: Evidence from an Unusual Policy Experiment," American Economic Review, American Economic Association, vol. 91(4), pages 795-813, September. [Downloadable!] (restricted)
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  11. 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. [Downloadable!] (restricted)
  12. De Vos, Susan, 1985. "An Old-Age Security Incentive for Children in the Philippines and Taiwan," Economic Development and Cultural Change, University of Chicago Press, vol. 33(4), pages 793-814, July.
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  14. Hazan, Moshe & Zoabi, Hosny, 2005. "Does Longevity Cause Growth?," CEPR Discussion Papers 4931, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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