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Can Microinsurance Help Prevent Child Labor? An Impact Evaluation from Pakistan

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Author Info

  • Landmann, Andreas

    ()
    (University of Mannheim)

  • Frölich, Markus

    ()
    (University of Mannheim)

Abstract

Child labor is a common consequence of economic shocks in developing countries. We show how reducing vulnerability can affect child labor and schooling. We exploit the extension of a health and accident insurance scheme by a Pakistani microfinance institution (MFI) that was set up as a randomized controlled trial and accompanied by household panel surveys. Together with increased coverage the MFI offered assistance with claim procedures in treatment branches. Using Difference-in-difference techniques we find lower incidence of child labor and lower child labor earnings caused by the innovation. Separating the two parts of the innovation package, the effects of claim assistance are mostly insignificant, while increased insurance coverage has large effects on child labor outcomes and days missed at school. Consistent with a theoretical model we develop in this paper, the effect is largely due to an ex-ante feeling of protection as opposed to a shock-mitigation effect.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7337.

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Length: 53 pages
Date of creation: Apr 2013
Date of revision:
Handle: RePEc:iza:izadps:dp7337

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Keywords: child labor; health insurance; Pakistan;

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References

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  1. Wagstaff, Adam & Lindelow, Magnus & Gao Jun & Xu Ling & Qian Juncheng, 2007. "Extending health insurance to the rural population : an impact evaluation of China's new cooperative medical scheme," Policy Research Working Paper Series, The World Bank 4150, The World Bank.
  2. Dercon, Stefan & Christiaensen, Luc, 2007. "Consumption risk, technology adoption, and poverty traps : evidence from Ethiopia," Policy Research Working Paper Series, The World Bank 4257, The World Bank.
  3. Estevan, Fernanda & Baland, Jean-Marie, 2007. "Mortality risks, education and child labor," Journal of Development Economics, Elsevier, Elsevier, vol. 84(1), pages 118-137, September.
  4. Pouliot, William, 2006. "Introducing uncertainty into Baland and Robinson's model of child labour," Journal of Development Economics, Elsevier, Elsevier, vol. 79(1), pages 264-272, February.
  5. Gin, Xavier & Yang, Dean, 2009. "Insurance, credit, and technology adoption: Field experimental evidencefrom Malawi," Journal of Development Economics, Elsevier, Elsevier, vol. 89(1), pages 1-11, May.
  6. Furio C. Rosati & Mariacristina Rossi, 2003. "Children's Working Hours and School Enrollment: Evidence from Pakistan and Nicaragua," CEIS Research Paper, Tor Vergata University, CEIS 25, Tor Vergata University, CEIS.
  7. Emerson, Patrick M. & Portela Souza, André, 2007. "Is Child Labor Harmful? The Impact of Working Earlier in Life on Adult Earnings," IZA Discussion Papers 3027, Institute for the Study of Labor (IZA).
  8. Ranjan, Priya, 2001. "Credit constraints and the phenomenon of child labor," Journal of Development Economics, Elsevier, Elsevier, vol. 64(1), pages 81-102, February.
  9. Dekker, Marleen & Wilms, Annegien, 2010. "Health Insurance and Other Risk-Coping Strategies in Uganda: The Case of Microcare Insurance Ltd," World Development, Elsevier, Elsevier, vol. 38(3), pages 369-378, March.
  10. Adam Wagstaff, 2010. "Estimating health insurance impacts under unobserved heterogeneity: the case of Vietnam's health care fund for the poor," Health Economics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 19(2), pages 189-208.
  11. Duryea, Suzanne & Lam, David & Levison, Deborah, 2007. "Effects of economic shocks on children's employment and schooling in Brazil," Journal of Development Economics, Elsevier, Elsevier, vol. 84(1), pages 188-214, September.
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  1. Reducing child labor with micro-insurance
    by Economic Logician in Economic Logic on 2013-05-20 14:27:00

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