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Mortality risks and child labor

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  • Fernanda, ESTEVAN
  • Jean-Marie, BALAND

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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Paper provided by Université catholique de Louvain, Département des Sciences Economiques in its series Discussion Papers (ECON - Département des Sciences Economiques) with number 2005040.

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Length: 17
Date of creation: 01 Jun 2005
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Handle: RePEc:ctl:louvec:2005040

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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. 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.
  3. Holger Strulik, 2002. "Child Mortality, Child Labour, and Economic Development," Quantitative Macroeconomics Working Papers 20205, Hamburg University, Department of Economics.
  4. Ravallion, Martin & Wodon, Quentin, 2000. "Does Child Labour Displace Schooling? Evidence on Behavioural Responses to an Enrollment Subsidy," Economic Journal, Royal Economic Society, vol. 110(462), pages C158-75, March.
  5. 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.
  6. Razin, Assaf, 1976. "Lifetime Uncertainty, Human Capital and Physical Capital," Economic Inquiry, Western Economic Association International, vol. 14(3), pages 439-48, September.
  7. Basu, Kaushik & Van, Pham Hoang, 1998. "The Economics of Child Labor," American Economic Review, American Economic Association, vol. 88(3), pages 412-27, June.
  8. George Psacharopoulos, 1997. "Child labor versus educational attainment Some evidence from Latin America," Journal of Population Economics, Springer, vol. 10(4), pages 377-386.
  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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