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Does child labor displace schooling? - evidence on behavioral responses to an enrollment subsidy

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Author Info
Ravallion, Martin
Wodon, Quentin

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Abstract

The authors try to determine whether children sent to work in rural Bangladesh are caught in a poverty trap, with the extra income to poor families from child labor coming at the expense of the children's longer-term prospects of escaping poverty through education. The poverty trap argument depends on children's work being substitutable for schooling. Casual observations and the descriptive statistics available from surveys seem to offer little support for the argument. To explore the question more deeply, the authors use a targeted school stipend to identify how much child labor substitutes for schooling. They find that Bangladesh's Food-for-Education program is a strong incentive for school attendance. A stipend with a value considerable less than the mean child wage was enough to ensure nearly full school attendance among participants. The enrollment also reduced the incidence of child labor, an effect accounted for only a small proportion of the increase in school enrollment. The reduction in the incidence of child labor among boys (girls) represents about one-quarter (one-eighth) of the increase in their school enrollment rate. Parents are clearly substituting other uses of their children's time to secure income gain from access to the program, with modest impact on earnings from their children's work. The authors'tests were limited. Work may well displace time for doing homework or attending after-school tutorials, for example. The authors were unable to identify such effects from the data available. There may also be other welfare losses to children from work (such as exposure to an unsafe working environment) as well as welfare gains (such as skills learned from working that enhance returns to schooling). But their results do lead them to question the seemingly common view that child labor is a major factor perpetuating poverty in Bangladesh by keeping children from poor families our of school.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2116.

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Date of creation: 31 May 1999
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Handle: RePEc:wbk:wbrwps:2116

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Keywords: Environmental Economics&Policies Labor Policies Public Health Promotion Health Monitoring&Evaluation Children and Youth Health Monitoring&Evaluation Environmental Economics&Policies Street Children Youth and Governance Children and Youth

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Rosenzweig, Mark R, 1982. "Educational Subsidy, Agricultural Development, and Fertility Change," The Quarterly Journal of Economics, MIT Press, vol. 97(1), pages 67-88, February. [Downloadable!] (restricted)
  2. Basu, Kaushik & Van, Pham Hoang, 1998. "The Economics of Child Labor," American Economic Review, American Economic Association, vol. 88(3), pages 412-27, June.
  3. Baland, J.M. & Robinson, J.A., 1998. "A Model of Child Labor," Papers 9803, Southern California - Department of Economics.
    Other versions:
  4. Rivers, Douglas & Vuong, Quang H., 1988. "Limited information estimators and exogeneity tests for simultaneous probit models," Journal of Econometrics, Elsevier, vol. 39(3), pages 347-366, November. [Downloadable!] (restricted)
  5. Smith, Richard J & Blundell, Richard W, 1986. "An Exogeneity Test for a Simultaneous Equation Tobit Model with an Application to Labor Supply," Econometrica, Econometric Society, vol. 54(3), pages 679-85, May. [Downloadable!] (restricted)
  6. Jacoby, Hanan G & Skoufias, Emmanuel, 1997. "Risk, Financial Markets, and Human Capital in a Developing Country," Review of Economic Studies, Blackwell Publishing, vol. 64(3), pages 311-35, July. [Downloadable!] (restricted)
  7. Grootaert, Christiaan & Kanbur, Ravi, 1995. "Child labor : a review," Policy Research Working Paper Series 1454, The World Bank. [Downloadable!]
  8. Swaminathan, Madhura, 1998. "Economic growth and the persistence of child labor: Evidence from an Indian city," World Development, Elsevier, vol. 26(8), pages 1513-1528, August. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Kaushik Basu & Pham Hoang Van, 1999. "The Economics of Child Labor: Reply," American Economic Review, American Economic Association, vol. 89(5), pages 1386-1388, December. [Downloadable!] (restricted)
  2. Schady, Norbert & Filmer, Deon, 2006. "Getting girls into school : evidence from a scholarship program in Cambodia," Policy Research Working Paper Series 3910, The World Bank. [Downloadable!]
  3. P. Deb & F. Rosati, 2002. "Determinants of Child Labour and School Attendance: The Role of Household Unobservables," UCW Working Paper 9, Understanding Children's Work (UCW Project). [Downloadable!]
    Other versions:
  4. Das, Jishnu & Quy-Toan Do & Ozler, Berk, 2004. "Conditional cash transfers and the equity-efficiency debate," Policy Research Working Paper Series 3280, The World Bank. [Downloadable!]
  5. Canals-Cerda, Jose & Ridao-Cano, Cristobal, 2004. "The dynamics of school and work in rural Bangladesh," Policy Research Working Paper Series 3330, The World Bank. [Downloadable!]
  6. Olivier Pierrard & Henri Sneessens, 2004. "Biased Technological Shocks, Wage Rigidities and Low-Skilled Unemployment," DNB Working Papers 020, Netherlands Central Bank, Research Department. [Downloadable!]
  7. Cynthia B. Lloyd, 2001. "World population in 2050: assessing the projections: discussion," Conference Series ; [Proceedings], Federal Reserve Bank of Boston. [Downloadable!]
  8. P. Deb & F. Rosati, 2004. "Estimating the effect of fertility decisions on child labour and schooling," UCW Working Paper 30, Understanding Children's Work (UCW Project). [Downloadable!]
    Other versions:
  9. Gautam Hazarika & Sudipta Sarangi, 2005. "Household Access to Microcredit and Child Work in Rural Malawi," IZA Discussion Papers 1567, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  10. Henriëtte Prast & Iman van Lelyveld, 2004. "New Architectures in the Regulation and Supervision of Financial Markets and Institutions: The Netherlands," DNB Working Papers 021, Netherlands Central Bank, Research Department. [Downloadable!]
  11. Drusilla K. Brown & Alan V. Deardorff & Robert M. Stern, 2001. "Child Labor: Theory, Evidence and Policy," Discussion Papers Series, Department of Economics, Tufts University 0111, Department of Economics, Tufts University. [Downloadable!]
    Other versions:
  12. Rajeev Dehejia & Roberta Gatti, 2002. "Child Labor: The Role of Income Variability and Access to Credit Across Countries," NBER Working Papers 9018, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  13. Gautam Hazarika & Arjun S. Bedi, 2006. "Child Work and Schooling Costs in Rural Northern India," IZA Discussion Papers 2136, Institute for the Study of Labor (IZA). [Downloadable!]
  14. Villani, Mattias & Larsson, Rolf, 2004. "The Multivariate Split Normal Distribution and Asymmetric Principal Components Analysis," Working Paper Series 175, Sveriges Riksbank (Central Bank of Sweden). [Downloadable!]
  15. M.Biggeri & L.Guarcello & S.Lyon & F.Rosati, 2003. "The Puzzle of 'Idle' Children: Neither in School nor performing Economic Activity: Evidence from six Countries," UCW Working Paper 5, Understanding Children's Work (UCW Project). [Downloadable!]
  16. Cameron, Lisa A., 2002. "Did social safety net scholarships reduce drop-out rates during the Indonesian economic crisis?," Policy Research Working Paper Series 2800, The World Bank. [Downloadable!]
  17. Véronique Flambard & Pierre Lasserre & Pierre Mohnen, 2004. "Snow Removal Auctions in Montreal: Costs, Informational Rents, and Procurement Management," CIRANO Working Papers 2004s-59, CIRANO. [Downloadable!]
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  18. David Lam & Letícia Marteleto, 2004. "A dinâmica da escolaridade das crianças brasileiras durante a transição demográfica: aumento no tamanho da coorte versus diminuição no tamanho da família," Textos para Discussão Cedeplar-UFMG td243, Cedeplar, Universidade Federal de Minas Gerais. [Downloadable!]
  19. Schady, Norbert & Araujo, Maria Caridad, 2006. "Cash transfers, conditions, school enrollment, and child work : evidence from a randomized experiment in Ecuador," Policy Research Working Paper Series 3930, The World Bank. [Downloadable!]
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