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Does child labor always decrease with income ? an evaluation in the context of a development program in Nicaragua

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Author Info
Del Carpio, Ximena V.
Abstract

This paper investigates the relationship of household income with child labor. The analysis uses a rich dataset obtained in the context of a conditional cash transfer program in a poor region of Nicaragua in 2005 and 2006. The program has a strong productive emphasis and seeks to diversify the work portfolio of beneficiaries while imposing conditionalities on the household. The author develops a simple model that relates child labor to household income, preferences, and production technology. It turns out that child labor does not always decrease with income; the relationship is complex and exhibits an inverted-U shape. Applying the data to the model confirms that the relationship is concave when all children (8-15 years of age) are included in the sample. Expanding the analysis by stratifying the sample by age and gender shows that the relationship holds only for older children, both genders. The author investigates the effect of the conditional cash transfer program on child labor. The results show that the program has a decreasing effect on total hours of work for the full sample of children. Disentangling labor into two types - physically demanding labor and non-physical labor - reveals that the program has opposite effects on each type; it decreases physically demanding labor while increasing participation in non-physical (more intellectually oriented) tasks for children.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4694.

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Date of creation: 01 Aug 2008
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Handle: RePEc:wbk:wbrwps:4694

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Related research
Keywords: Street Children; Youth and Governance; Labor Policies; Children and Youth; Labor Markets;

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  1. 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)
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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)
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  3. George Psacharopoulos & Harry Anthony Patrinos, 1997. "Family size, schooling and child labor in Peru - An empirical analysis," Journal of Population Economics, Springer, vol. 10(4), pages 387-405. [Downloadable!] (restricted)
  4. Ranjan, Priya, 2001. "Credit constraints and the phenomenon of child labor," Journal of Development Economics, Elsevier, vol. 64(1), pages 81-102, February. [Downloadable!] (restricted)
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  5. Sonia Bhalotra & Christopher Heady, 2003. "Child Farm Labor: The Wealth Paradox," Bristol Economics Discussion Papers 03/553, Department of Economics, University of Bristol, UK. [Downloadable!]
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  6. Basu, Kaushik & Van, Pham Hoang, 1998. "The Economics of Child Labor," American Economic Review, American Economic Association, vol. 88(3), pages 412-27, June.
  7. Eric Edmonds, 2006. "Understanding sibling differences in child labor," Journal of Population Economics, Springer, vol. 19(4), pages 795-821, October. [Downloadable!] (restricted)
  8. Sudipta Sarangi & Gautam Hararika, . "Household Access to Microcredit and Child Work in Rural Malawi," Departmental Working Papers 2006-08, Department of Economics, Louisiana State University. [Downloadable!]
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  9. Parsons, Donald O & Goldin, Claudia, 1989. "Parental Altruism and Self-Interest: Child Labor among Late Nineteenth-Century American Families," Economic Inquiry, Oxford University Press, vol. 27(4), pages 637-59, October.
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  11. Kathleen Beegle & Rajeev Dehejia & Roberta Gatti, 2003. "Child Labor, Crop Shocks, and Credit Constraints," NBER Working Papers 10088, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  12. Ponczek, Vladimir & Portela, André, 2007. "The Causal Effect of Family Size on Child Labor and Education," Textos para discussão 162, Escola de Economia de São Paulo, Getulio Vargas Foundation (Brazil). [Downloadable!]
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  14. Skoufias, Emmanuel & Parker, Susan W., 2001. "Conditional cash transfers and their impact on child work and schooling," FCND briefs 123, International Food Policy Research Institute (IFPRI). [Downloadable!]
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  15. Jean-Marie Baland & James A. Robinson, 2000. "Is Child Labor Inefficient?," Journal of Political Economy, University of Chicago Press, vol. 108(4), pages 663-679, August. [Downloadable!] (restricted)
  16. Eric V. Edmonds, 2007. "Child Labor," IZA Discussion Papers 2606, Institute for the Study of Labor (IZA). [Downloadable!]
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  17. Becker, Gary S & Lewis, H Gregg, 1973. "On the Interaction between the Quantity and Quality of Children," Journal of Political Economy, University of Chicago Press, vol. 81(2), pages S279-88, Part II, . [Downloadable!] (restricted)
  18. Beegle, Kathleen & Dehejia, Rajeev & Gatti, Roberta, 2005. "Why should we care about child labor? The education, labor market, and health consequences of child labor," Policy Research Working Paper Series 3479, The World Bank. [Downloadable!]
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  19. François Bourguignon & Francisco H. G. Ferreira & Phillippe G. Leite, 2003. "Conditional Cash Transfers, Schooling and Child Labor : Micro-Simulating Bolsa Escola," DELTA Working Papers 2003-07, DELTA (Ecole normale supérieure). [Downloadable!]
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  20. Foster, Andrew D & Rosenzweig, Mark R, 1994. "A Test for Moral Hazard in the Labor Market: Contractual Arrangements, Effort, and Health," The Review of Economics and Statistics, MIT Press, vol. 76(2), pages 213-27, May. [Downloadable!] (restricted)
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