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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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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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  25. Karan Singh, B, 2011. "Impact of adverse economic shocks on the Indian child labour market and the schooling of children of poor households," MPRA Paper 30958, University Library of Munich, Germany.
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  29. Pallage, Stephane & Zimmermann, Christian, 2001. "Voting on Unemployment Insurance," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(4), pages 903-23, November.
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