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Poverty Alleviation and Child Labor

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Author Info
Eric V. Edmonds
Norbert Schady

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Abstract

How important are subsistence concerns in a family’s decision to send a child to work? We consider this question in Ecuador, where poor families are selected at random to receive a cash transfer that is equivalent to 7 percent of monthly expenditures. Winning the cash transfer lottery is associated with a decline in work for pay away from the child's home. The cash transfer is greater than the rise in schooling costs that comes with the end of primary school, but it is less than 20 percent of the income paid to child laborers in the labor market. Despite being less than foregone earnings, poor families seem to use the lottery award to delay the child's entry into paid employment and protect the child's schooling status. Schooling expenditures rise with the lottery, but total expenditures in the household decline relative to the control population because of foregone child labor earnings.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 15345.

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Date of creation: Sep 2009
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Handle: RePEc:nbr:nberwo:15345

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Find related papers by JEL classification:
I38 - Health, Education, and Welfare - - Welfare and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
J82 - Labor and Demographic Economics - - Labor Standards - - - Labor Force Composition

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  2. Attanasio, Orazio & Fitzsimons, Emla & Gomez, Ana & Lopez, Diana & Meghir, Costas & Mesnard, Alice, 2006. "Child Education and Work Choices in the Presence of a Conditional Cash Transfer Programme in Rural Colombia," CEPR Discussion Papers 5792, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
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  8. Eric V. Edmonds, 2007. "Child Labor," NBER Working Papers 12926, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  12. Schady, Norbert & Rosero, José, 2008. "Are cash transfers made to women spent like other sources of income?," Economics Letters, Elsevier, vol. 101(3), pages 246-248, December. [Downloadable!] (restricted)
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  13. Norbert R. Schady, 2004. "Do Macroeconomic Crises Always Slow Human Capital Accumulation?," World Bank Economic Review, Oxford University Press, vol. 18(2), pages 131-154.
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  18. Ravallion, Martin & Wodon, Quentin, 2000. "Does Child Labour Displace Schooling? Evidence on Behavioural Responses to an Enrollment Subsidy," Economic Journal, Royal Economic Society, vol. 110(462), pages C158-75, March. [Downloadable!] (restricted)
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  19. Eric V. Edmonds, 2005. "Does Child Labor Decline with Improving Economic Status?," Journal of Human Resources, University of Wisconsin Press, vol. 40(1). [Downloadable!] (restricted)
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