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Child Labor, Idiosyncratic Shocks, and Social Policy

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  • Alice Fabre
  • Stéphane Pallage

Abstract

In this paper, we measure the welfare effects of banning child labor in an economy with strong idiosyncratic shocks to employment. We then design two different policies: an unemployment insurance program and a universal basic income system. We show that they can often lead to an endogenous elimination of child labor. We work within a dynamic, general equilibrium model calibrated to South Africa in the 1990s.

Suggested Citation

  • Alice Fabre & Stéphane Pallage, 2011. "Child Labor, Idiosyncratic Shocks, and Social Policy," Cahiers de recherche 1115, CIRPEE.
    • Handle: RePEc:lvl:lacicr:1115
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    Cited by:

    1. Wang, Cheng & Williamson, Stephen, 1996. "Unemployment insurance with moral hazard in a dynamic economy," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 44(1), pages 1-41, June.
    2. Manini Ojha, 2022. "Gender gap in schooling: Is there a role for health insurance?," Journal of International Development, John Wiley & Sons, Ltd., vol. 34(1), pages 29-54, January.
    3. Chakraborty, Kamalika & Chakraborty, Bidisha, 2018. "Endogenous Altruism, Learning by Doing Effect and Impact of Domestic Policies on Child Labour," MPRA Paper 89229, University Library of Munich, Germany.
    4. Chakraborty, Kamalika & Chakraborty, Bidisha, 2016. "Learning by doing, low level equilibrium trap, and effect of domestic policies on child labour," MPRA Paper 74712, University Library of Munich, Germany.
    5. Chakraborty, Kamalika & Chakraborty, Bidisha, 2016. "Child labour ban versus Education subsidy in a model with learning by doing effect in unskilled work," MPRA Paper 74203, University Library of Munich, Germany.
    6. Mehdi Feizi & Saeed Malek Sadati & Mozhgan Asna-ashary, 2023. "Child Labor and Unemployment: a Tale of Two Associations in Urban and Rural Areas in Iran," Child Indicators Research, Springer;The International Society of Child Indicators (ISCI), vol. 16(3), pages 1297-1314, June.
    7. Raymond Elikplim Kofinti & Josephine Baako-Amponsah & Prince Danso, 2023. "Household National Health Insurance Subscription and Learning Outcomes of Poor Children in Ghana," Child Indicators Research, Springer;The International Society of Child Indicators (ISCI), vol. 16(1), pages 357-394, February.
    8. Chakraborty, Bidisha & Chakraborty, Kamalika, 2016. "Low Level Equilibrium Trap, Unemployment, School Quality, Child Labour and Human Capital Formation," MPRA Paper 74621, University Library of Munich, Germany.
    9. Kamalika Chakraborty & Bidisha Chakraborty, 2018. "Low level equilibrium trap, unemployment, efficiency of education system, child labour and human capital formation," Journal of Economics, Springer, vol. 125(1), pages 69-95, September.

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    More about this item

    Keywords

    Child labor; Idiosyncratic shocks; Unemployment insurance; Universal basic income; Heterogeneous agents; Child labor ban;
    All these keywords.

    JEL classification:

    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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