Can Microinsurance Help Prevent Child Labor? An Impact Evaluation from Pakistan
AbstractChild 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 InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7337.
Length: 53 pages
Date of creation: Apr 2013
Date of revision:
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Find related papers by JEL classification:
- I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
- J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
- J82 - Labor and Demographic Economics - - Labor Standards - - - Labor Force Composition
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-04-27 (All new papers)
- NEP-DEM-2013-04-27 (Demographic Economics)
- NEP-DEV-2013-04-27 (Development)
- NEP-IAS-2013-04-27 (Insurance Economics)
- NEP-MFD-2013-04-27 (Microfinance)
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Reducing child labor with micro-insurance
by Economic Logician in Economic Logic on 2013-05-20 14:27:00
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