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Child Labor and the Education of a Society

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  • Bell, Clive

    ()
    (Heidelberg University)

  • Gersbach, Hans

    ()
    (ETH Zurich)

Abstract

We examine economic growth, inequality and education when the wellspring of growth is the formation of human capital through a combination of the quality of child-rearing and formal schooling. The existence of multiple steady states is established, including a poverty trap, wherein children work full-time and no human capital accumulation takes place, with continuous growth at an asymptotically steady rate as an alternative. We show that a society can escape from the poverty trap into a condition of continuous growth through a program of taxes and transfers. Temporary inequality is a necessary condition to escape in finite time, but long-run inequalities are avoidable provided sufficiently heavy, but temporary taxes can be imposed on the better-off. Programs aiming simply at high attendance rates in the present can be strongly non-optimal.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 338.

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Length: 50 pages
Date of creation: Aug 2001
Date of revision:
Publication status: published in: Macroeconomic Dynamics, 2009, 12 (2), 220-249.
Handle: RePEc:iza:izadps:dp338

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Keywords: growth and inequality; education; human capital; Child labor; redistributive policies; poverty traps;

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References

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