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Fertility, Education, and Market Failures

  • Sylvain Dessy

    ()

    (Departement d’economique, Universite Laval, Sainte-Foy, QC)

  • Stephane Pallage

    ()

    (Departement des sciences ´economiques, Universite du Quebec `a Montreal)

We show that coordination failures may be part of an explanation for the demographic differences between rich and poor countries and their differing attitudes towards the use of child labor. Our analysis is carried out within a two-period, general equilibrium model with endogenous fertility, parental investment in children’s education and ?rms’ tradeoff between traditional technologies and the adoption of skill-intensive, modern ones. The model exhibits multiple equilibria due to the lack of a coordination mechanism between parental decisions on the quantity and the quality of children and entrepreneurs’ technology choices.

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Article provided by African Finance and Economic Association in its journal Journal of African Development.

Volume (Year): 5 (2002)
Issue (Month): 2 ()
Pages: 71-85

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Handle: RePEc:afe:journl:v:5:y:2002:i:2:p:71-85
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  1. Ranjan, P., 1999. ""Credit Constraints and the Phenomenon of Child Labor"," Papers 98-99-12, California Irvine - School of Social Sciences.
  2. Kiminori Matsuyama, 1996. "Why Are There Rich and Poor Countries? Symmetry-Breaking in the World Economy," NBER Working Papers 5697, National Bureau of Economic Research, Inc.
  3. Acemoglu, D., 1994. "Search in the Labor market: Incomplete Contracts and Growth," Working papers 94-23, Massachusetts Institute of Technology (MIT), Department of Economics.
  4. Sylvain Dessy & Stephane Pallage, 2000. "Child Labor and Coordination Failures," Cahiers de recherche CREFE / CREFE Working Papers 109, CREFE, Université du Québec à Montréal.
  5. Barro, R.J. & Becker, G.S., 1988. "Fertility Choice In A Model Of Economic Growth," University of Chicago - Economics Research Center 88-8, Chicago - Economics Research Center.
  6. Murphy, Kevin M & Shleifer, Andrei & Vishny, Robert W, 1989. "Industrialization and the Big Push," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1003-26, October.
  7. Gary S. Becker & Kevin M. Murphy & Robert Tamura, 1994. "Human Capital, Fertility, and Economic Growth," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education (3rd Edition), pages 323-350 National Bureau of Economic Research, Inc.
  8. Glomm, Gerhard, 1997. "Parental choice of human capital investment," Journal of Development Economics, Elsevier, vol. 53(1), pages 99-114, June.
  9. Peter Howitt, 2000. "Endogenous Growth and Cross-Country Income Differences," American Economic Review, American Economic Association, vol. 90(4), pages 829-846, September.
  10. Basu, Kaushik, 2001. "Gender and Say: A Model of Household Behavior with Endogenously-Determined Balance of Power," Working Papers 01-01, Cornell University, Center for Analytic Economics.
  11. Kaushik Basu, 1999. "Child Labor: Cause, Consequence, and Cure, with Remarks on International Labor Standards," Journal of Economic Literature, American Economic Association, vol. 37(3), pages 1083-1119, September.
  12. Sylvain Dessy & Stephane Pallage, 2001. "Why Banning the Worst Forms of Child Labour Would Hurt Poor Countries," Cahiers de recherche CREFE / CREFE Working Papers 135, CREFE, Université du Québec à Montréal.
  13. Stephen L. Parente & Edward C. Prescott, 1997. "Monopoly rights: a barrier to riches," Staff Report 236, Federal Reserve Bank of Minneapolis.
  14. Dessy, Sylvain E., 2000. "A defense of compulsive measures against child labor," Journal of Development Economics, Elsevier, vol. 62(1), pages 261-275, June.
  15. Ranjan, Priya, 1999. "An economic analysis of child labor," Economics Letters, Elsevier, vol. 64(1), pages 99-105, July.
  16. Parente, Stephen L & Prescott, Edward C, 1994. "Barriers to Technology Adoption and Development," Journal of Political Economy, University of Chicago Press, vol. 102(2), pages 298-321, April.
  17. 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.
  18. Basu, Kaushik, 1999. "The intriguing relation between adult minimum wage and child labor," Policy Research Working Paper Series 2173, The World Bank.
  19. Stephane Pallage & Michel A. Robe, 2003. "On the Welfare Cost of Economic Fluctuations in Developing Countries," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 44(2), pages 677-698, 05.
  20. Dessy, Sylvain & Pallage, Stephane, 2003. "Taxes, inequality and the size of the informal sector," Journal of Development Economics, Elsevier, vol. 70(1), pages 225-233, February.
  21. Basu, Kaushik & Van, Pham Hoang, 1998. "The Economics of Child Labor," American Economic Review, American Economic Association, vol. 88(3), pages 412-27, June.
  22. 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, .
  23. Canagarajah, Sudharshan & Coulombe, Harold, 1997. "Child labor and schooling in Ghana," Policy Research Working Paper Series 1844, The World Bank.
  24. 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.
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