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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.

Suggested Citation

  • Fernanda, ESTEVAN & Jean-Marie, BALAND, 2005. "Mortality risks and child labor," Discussion Papers (ECON - Département des Sciences Economiques) 2005040, Université catholique de Louvain, Département des Sciences Economiques.
    • Handle: RePEc:ctl:louvec:2005040
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    1. Razin, Assaf, 1976. "Lifetime Uncertainty, Human Capital and Physical Capital," Economic Inquiry, Western Economic Association International, vol. 14(3), pages 439-448, September.
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