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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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    3. Kathleen Beegle & Rajeev Dehejia & Roberta Gatti, 2003. "Child Labor, Crop Shocks, and Credit Constraints," NBER Working Papers 10088, National Bureau of Economic Research, Inc.
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    8. Sonia Bhalotra & Christopher Heady, 2003. "Child Farm Labor: The Wealth Paradox," World Bank Economic Review, World Bank Group, World Bank Group, vol. 17(2), pages 197-227, December.
    9. Maluccio, John A. & Flores, Rafael, 2004. "Impact evaluation of a conditional cash transfer program," FCND briefs, International Food Policy Research Institute (IFPRI) 184, International Food Policy Research Institute (IFPRI).
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    12. Kathleen Beegle & Rajeev Dehejia & Roberta Gatti, 2004. "Why Should We Care About Child Labor? The Education, Labor Market, and Health Consequences of Child Labor," NBER Working Papers 10980, National Bureau of Economic Research, Inc.
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    14. 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).
    15. Basu, Kaushik & Van, Pham Hoang, 1998. "The Economics of Child Labor," American Economic Review, American Economic Association, American Economic Association, vol. 88(3), pages 412-27, June.
    16. 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.
    17. Rajeev H. Dehejia & Roberta Gatti, 2002. "Child labor: The role of income variability and access to credit across countries," Discussion Papers, Columbia University, Department of Economics 0102-69, Columbia University, Department of Economics.
    18. 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, University of Chicago Press, vol. 81(2), pages S279-88, Part II, .
    19. Jean-Marie Baland & James A. Robinson, 2000. "Is Child Labor Inefficient?," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 108(4), pages 663-679, August.
    20. 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, Western Economic Association International, vol. 27(4), pages 637-59, October.
    21. Eric V. Edmonds, 2005. "Does Child Labor Decline with Improving Economic Status?," Journal of Human Resources, University of Wisconsin Press, vol. 40(1).
    22. George Psacharopoulos & Harry Anthony Patrinos, 1997. "Family size, schooling and child labor in Peru - An empirical analysis," Journal of Population Economics, Springer, Springer, vol. 10(4), pages 387-405.
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