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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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  • Del Carpio, Ximena V.
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    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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    Bibliographic Info

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

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    1. Basu, Kaushik & Das, Sanghamitra & Dutta, Bhaskar, 2009. "Child Labor and Household Wealth : Theory and Empirical Evidence of an Inverted-U," The Warwick Economics Research Paper Series (TWERPS) 888, University of Warwick, Department of Economics.
    2. Carol Ann Rogers & Kenneth A. Swinnerton, 2004. "Does Child Labor Decrease When Parental Incomes Rise?," Journal of Political Economy, University of Chicago Press, vol. 112(4), pages 939-968, August.
    3. Orazio Attanasio & Emla Fitzsimons & Ana Gomez & Diana Lopez & Costas Meghir & Alice Mesnard, 2006. "Child education and work choices in the presence of a conditional cash transfer programme in rural Colombia," IFS Working Papers W06/01, Institute for Fiscal Studies.
    4. Bhalotra, Sonia & Heady, Christopher, 2001. "Child farm labour : the wealth paradox," Social Protection Discussion Papers 24088, The World Bank.
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    7. Basu, Kaushik & Van, Pham Hoang, 1998. "The Economics of Child Labor," American Economic Review, American Economic Association, vol. 88(3), pages 412-27, June.
    8. Ranjan, Priya, 2001. "Credit constraints and the phenomenon of child labor," Journal of Development Economics, Elsevier, vol. 64(1), pages 81-102, February.
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    12. Eric Edmonds, 2007. "Child Labor," Working Papers id:988, eSocialSciences.
    13. Maluccio, John A. & Flores, Rafael, 2004. "Impact evaluation of a conditional cash transfer program," FCND discussion papers 184, International Food Policy Research Institute (IFPRI).
    14. Emmanuel Skoufias & Susan Wendy Parker, 2001. "Conditional Cash Transfers and Their Impact on Child Work and Schooling: Evidence from the PROGRESA Program in Mexico," JOURNAL OF LACEA ECONOMIA, LACEA - LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION.
    15. 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, .
    16. 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.
    17. Skoufias, Emmanuel & Parker, Susan W., 2001. "Conditional cash transfers and their impact on child work and schooling," FCND discussion papers 123, International Food Policy Research Institute (IFPRI).
    18. Eric V. Edmonds, 2005. "Does Child Labor Decline with Improving Economic Status?," Journal of Human Resources, University of Wisconsin Press, vol. 40(1).
    19. Parsons, Donald O & Goldin, Claudia, 1989. "Parental Altruism and Self-Interest: Child Labor among Late Nineteenth-Century American Families," Economic Inquiry, Western Economic Association International, vol. 27(4), pages 637-59, October.
    20. 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.
    21. Ponczek, Vladimir Pinheiro & Souza, André Portela Fernandes de, 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).
    22. Eric Edmonds, 2006. "Understanding sibling differences in child labor," Journal of Population Economics, Springer, vol. 19(4), pages 795-821, October.
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