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Child Labor, Idiosyncratic Shocks, and Social Policy

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  • Alice Fabre

    ()
    (AMSE - Aix-Marseille School of Economics - Aix-Marseille Univ. - Centre national de la recherche scientifique (CNRS) - École des Hautes Études en Sciences Sociales [EHESS] - Ecole Centrale Marseille (ECM))

  • Stéphane Pallage

    (CIRPEE and Département des Sciences Economiques - Université du Québec à Montréal)

Abstract

In this paper, we provide a dynamic model with heterogeneous agents to study child labor in an economy with idiosyncratic shocks to employment. Households facing adverse shocks may use child labor as a buffer to smooth consumption. We show that the introduction of an unemployment insurance program and/or a universal basic income system help eliminate child labor endogenously in this context. A calibration to South Africa in the 1990s is provided.

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Bibliographic Info

Paper provided by HAL in its series Working Papers with number halshs-00913666.

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Date of creation: Nov 2013
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Handle: RePEc:hal:wpaper:halshs-00913666

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Keywords: child labor; idiosyncratic shocks; unemployment insurance; universal basic income; heterogeneous agents; child labor ban;

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  1. Dessy, Sylvain E. & Pallage, Stephane, 2001. "Child labor and coordination failures," Journal of Development Economics, Elsevier, vol. 65(2), pages 469-476, August.
  2. Hopenhayn, Hugo A & Nicolini, Juan Pablo, 1997. "Optimal Unemployment Insurance," Journal of Political Economy, University of Chicago Press, vol. 105(2), pages 412-38, April.
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  8. Basu, Kaushik & Van, Pham Hoang, 1998. "The Economics of Child Labor," American Economic Review, American Economic Association, vol. 88(3), pages 412-27, June.
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  13. Doepke, Matthias & Zilibotti, Fabrizio, 2008. "International Labor Standards and the Political Economy of Child Labor Regulation," IZA Discussion Papers 3742, Institute for the Study of Labor (IZA).
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  15. Jorge Soares, 2010. "Welfare Impact Of A Ban On Child Labor," Economic Inquiry, Western Economic Association International, vol. 48(4), pages 1048-1064, October.
  16. Basu, Kaushik & Zarghamee, Homa, 2009. "Is product boycott a good idea for controlling child labor? A theoretical investigation," Journal of Development Economics, Elsevier, vol. 88(2), pages 217-220, March.
  17. Antoine Bommier & Pierre Dubois, 2002. "Rotten Parents and Child Labor," Research Unit Working Papers 0202, Laboratoire d'Economie Appliquee, INRA.
  18. Luis Felipe López Calva, 2002. "A social stigma model of child labor," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 17(2), pages 193-217.
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  23. Pallage, Stephane & Zimmermann, Christian, 2007. "Buying out child labor," Journal of Macroeconomics, Elsevier, vol. 29(1), pages 75-90, March.
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  25. 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.
  26. Pallage, Stephane & Zimmermann, Christian, 2005. "Heterogeneous labor markets and generosity towards the unemployed: an international perspective," Journal of Comparative Economics, Elsevier, vol. 33(1), pages 88-106, March.
  27. Steven Shavell & Laurence Weiss, 1978. "The Optimal Payment of Unemployment Insurance Benefits over Time," Cowles Foundation Discussion Papers 503, Cowles Foundation for Research in Economics, Yale University.
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  29. Delphine Boutin, 2011. "Envoi de fonds et allocation du temps des enfants au Niger : L’effet indirect des chocs négatifs," Larefi Working Papers 1105, Larefi, Université Bordeaux 4.
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