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The Consequences of Child Market Work on the Growth of Human Capital

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  • Armand A Sim
  • Daniel Suryadarma
  • Asep Suryahadi

Abstract

Child labor is a phenomenon that has attracted a great amount of attention and research. Theoretical propositions suggest that child labor is inefficient if it adversely affects future earning ability. This paper contributes to the literature on the effects of child market work on human capital by focusing on the long-term growth in human capital, which is widely known to significantly affect earning ability. The paper also uses better measures of human capital by focusing on the output of the human capital production function: numeracy skills, cognitive skills, and pulmonary function. Using a rich longitudinal dataset on Indonesia, we find strong negative effects of child labor on the growth of both numeracy and cognitive skills in the next seven years. In addition, we find a strong and negative effect on pulmonary function as measured through lung capacity. Comparing the effects by gender and type of work, we find that female child workers suffer more adverse effects on mathematical skills growth, while male child workers experience much smaller growth in pulmonary function. We also find that child workers who work for pay outside the family bore worse effects compared to child workers who work in the family business.

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File URL: https://crawford.anu.edu.au/acde/publications/publish/papers/wp2011/wp_econ_2011_10.pdf
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Bibliographic Info

Paper provided by The Australian National University, Arndt-Corden Department of Economics in its series Departmental Working Papers with number 2011-10.

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Length: 39 pages
Date of creation: 2011
Date of revision:
Handle: RePEc:pas:papers:2011-10

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Keywords: child labor; human capital; skills; health; Indonesia;

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References

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  1. Eric Hanushek & Ludger Woessmann, 2008. "The Role of Cognitive Skills in Economic Development," Discussion Papers 07-034, Stanford Institute for Economic Policy Research.
  2. Evans, Mary F. & Smith, V. Kerry, 2005. "Do new health conditions support mortality-air pollution effects?," Journal of Environmental Economics and Management, Elsevier, vol. 50(3), pages 496-518, November.
  3. Asep Suryahadi & Wenefrida Widyanti & Daniel Perwira & Sudarno Sumarto, 2003. "Minimum Wage Policy And Its Impact On Employment In The Urban Formal Sector," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 39(1), pages 29-50.
  4. Christelle Dumas, 2008. "Does work impede child's learning? The case of Senegal," THEMA Working Papers 2008-01, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
  5. Suryahadi, Asep & Suryadarma, Daniel & Sumarto, Sudarno, 2009. "The effects of location and sectoral components of economic growth on poverty: Evidence from Indonesia," Journal of Development Economics, Elsevier, vol. 89(1), pages 109-117, May.
  6. Beegle, Kathleen & Dehejia, Rajeev H & Gatti, Roberta, 2004. "The Education, Labour Market and Health Consequences of Child Labour," CEPR Discussion Papers 4443, C.E.P.R. Discussion Papers.
  7. Kis-Katos, Krisztina & Sparrow, Robert, 2009. "Child Labor and Trade Liberalization in Indonesia," IZA Discussion Papers 4376, Institute for the Study of Labor (IZA).
  8. de la Grandville,Olivier, 2009. "Economic Growth," Cambridge Books, Cambridge University Press, number 9780521725200.
  9. de la Grandville,Olivier, 2009. "Economic Growth," Cambridge Books, Cambridge University Press, number 9780521898010.
  10. Edmonds, Eric V., 2008. "Child Labor," Handbook of Development Economics, Elsevier.
  11. Daniel Suryadarma, 2010. "Labor Market Returns, Marriage Opportunities, or the Education System? Explaining Gender Differences in Numeracy in Indonesia," CEPR Discussion Papers 644, Centre for Economic Policy Research, Research School of Economics, Australian National University.
  12. Tao Kong & Arief Ramayandi, 2008. "Survey Of Recent Developments," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 44(1), pages 7-32.
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