Household Vulnerability and Child Labour: the Effect of Shocks, Credit Rationing and Insurance
AbstractBuilding upon the social-risk management approach, this paper examines dimensions of household behavior that are important for risk management and reduction of vulnerability, beyond issues of consumption. This paper attempts to assess to what extent risk and vulnerability factors are relevant for household decisions concerning children's school attendance and labor supply. Particular focus has been given to the evaluation of the effect of shocks, credit rationing and insurance on household decisions concerning children's activities. On the basis of a theoretical approach based on well known results relative to human capital investment decision and children's labor supply, the paper developed an estimation strategy that allows an assessment of the importance of a set of risk factors. Because of the potential endogeneity of the variable of interest, methodology based on propensity scores was applied. The analysis of the distribution of propensity scores for the "treated" and "not treated" population for the population of interest allow the conclusion that, given the maintained hypothesis of unconfoudness on observables, casual inference can be safely drawn from these estimates. Also computed is the ATE that confirms the main results obtained through the regression analysis: which indicates that credit rationing is extremely important in determining the household's decision to invest in the human capital of the children.
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Bibliographic InfoPaper provided by Understanding Children's Work (UCW Programme) in its series UCW Working Paper with number 3.
Date of creation: Nov 2002
Date of revision:
Other versions of this item:
- Lorenzo Guarcello & Fabrizia Mealli & Furio Rosati, 2010. "Household vulnerability and child labor: the effect of shocks, credit rationing, and insurance," Journal of Population Economics, Springer, vol. 23(1), pages 169-198, January.
- Guarcelllo, Lorenzo & Mealli, Fabrizia & Rosati, Furio Camillo, 2003. "Household vulnerability and child labor : the effect of shocks, credit rationing and insurance," Social Protection Discussion Papers 29136, The World Bank.
- D1 - Microeconomics - - Household Behavior
- O1 - Economic Development, Technological Change, and Growth - - Economic Development
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-03-28 (All new papers)
- NEP-DEV-2004-03-28 (Development)
- NEP-HEA-2004-03-28 (Health Economics)
- NEP-SEA-2004-03-28 (South East Asia)
- NEP-TRA-2004-03-28 (Transition Economics)
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