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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Length: Date of creation: Sep 2009 Date of revision: 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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Barham, Vicky & Boadway, Robin & Marchand, Maurice & Pestieau, Pierre, 1995.
"Education and the poverty trap,"
European Economic Review,
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BARHAM, Vicky & BOADWAY, Robin & MARCHAND, Maurice & PESTIEAU, Pierre, 1992.
"Education and the poverty trap,"
CORE Discussion Papers
1992010, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
Eric V. Edmonds, 2007.
"Child Labor,"
NBER Working Papers
12926, National Bureau of Economic Research, Inc.
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