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Child labor, agricultural shocks and labor sharing in rural Ethiopia

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  • Debebe, Z.Y.

Abstract

The author studies the effect of an agricultural shock and a labor sharing arrangement (informal social network) on child labor. Albeit bad parental preference to child labor (as the strand of literature claims), poor households face compelling situations to send their child to work. This is, especially, true when they are hit by an income shock and face a binding adult labor constraint. The author used panel data from the ERHS and employed a fixed effects model to pin down causal relation between shocks, membership in a labor sharing arrangement and child labor. It was found that child labor is, indeed, a buffer stock. Though a labor sharing arrangement doesn’t affect child labor at normal times, it helps households to lessen the pressure to rely on it when hit by idiosyncratic shocks. While almost the whole effect of these shocks is offset by participation in a labor sharing arrangement, the covariate shock is not. Even if this may well affect a child’s academic performance, school attendance doesn’t decrease. This differential effect of shocks on child labor in participant households might be because of the extra adult labor made available or due to mutual support that comes with these social networks. This paper is indicative of the importance of considering social networks in smoothing out consumption. Further, it highlights the difficulty to cope up with covariate shocks and hence, calls for development interventions that are particularly meant to address their impact.

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Bibliographic Info

Paper provided by International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague in its series ISS Working Papers - General Series with number 18702.

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Date of creation: 01 Jan 2010
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Handle: RePEc:ems:euriss:18702

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Keywords: Ethiopia; child labor; labor sharing; shocks; social networks;

References

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  1. Jacoby, Hanan G & Skoufias, Emmanuel, 1997. "Risk, Financial Markets, and Human Capital in a Developing Country," Review of Economic Studies, Wiley Blackwell, vol. 64(3), pages 311-35, July.
  2. Denis Cogneau & Rémi Jedwab, 2008. "Family income and child outcomes: the 1990 cocoa price shock in Cote d’Ivoire," Working Papers DT/2008/05, DIAL (Développement, Institutions et Mondialisation).
  3. Calero, Carla & Bedi, Arjun S. & Sparrow, Robert, 2009. "Remittances, Liquidity Constraints and Human Capital Investments in Ecuador," World Development, Elsevier, vol. 37(6), pages 1143-1154, June.
  4. Stefan Dercon, 2000. "Income risk, coping strategies and safety nets," Economics Series Working Papers WPS/2000-26, University of Oxford, Department of Economics.
  5. Beegle, Kathleen & Dehejia, Rajeev H. & Gatti, Roberta, 2006. "Child labor and agricultural shocks," Journal of Development Economics, Elsevier, vol. 81(1), pages 80-96, October.
  6. Rosenzweig, Mark R, 1988. "Risk, Implicit Contracts and the Family in Rural Areas of Low-income Countries," Economic Journal, Royal Economic Society, vol. 98(393), pages 1148-70, December.
  7. Robert M. Townsend, 1995. "Consumption Insurance: An Evaluation of Risk-Bearing Systems in Low-Income Economies," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 83-102, Summer.
  8. Kaushik Basu, 1999. "Child Labor: Cause, Consequence, and Cure, with Remarks on International Labor Standards," Journal of Economic Literature, American Economic Association, vol. 37(3), pages 1083-1119, September.
  9. Anjini Kochar, 1999. "Smoothing Consumption by Smoothing Income: Hours-of-Work Responses to Idiosyncratic Agricultural Shocks in Rural India," The Review of Economics and Statistics, MIT Press, vol. 81(1), pages 50-61, February.
  10. Krishnan, Pramila & Sciubba, Emanuela, 2008. "Links and Architecture in Village Networks," CEPR Discussion Papers 6787, C.E.P.R. Discussion Papers.
  11. 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.
  12. Ranjan, Priya, 1999. "An economic analysis of child labor," Economics Letters, Elsevier, vol. 64(1), pages 99-105, July.
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