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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. Glomm, Gerhard, 1997. "Parental choice of human capital investment," Journal of Development Economics, Elsevier, vol. 53(1), pages 99-114, June.
  3. Ranjan, Priya, 1999. "An economic analysis of child labor," Economics Letters, Elsevier, vol. 64(1), pages 99-105, July.
  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. Robert J. Barro & Gary S. Becker, . "Fertility Choice in a Model of Economic Growth," University of Chicago - Population Research Center 88-8, Chicago - Population Research Center.
  6. 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.
  7. Kaushik Basu, 2004. "Gender and Say A Model of Household Behavior with Endogenously-determined Balance of Power," Harvard Institute of Economic Research Working Papers 2054, Harvard - Institute of Economic Research.
  8. Basu, Kaushik & Van, Pham Hoang, 1998. "The Economics of Child Labor," American Economic Review, American Economic Association, vol. 88(3), pages 412-27, June.
  9. 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.
  10. Canagarajah, Sudharshan & Coulombe, Harold, 1997. "Child labor and schooling in Ghana," Policy Research Working Paper Series 1844, The World Bank.
  11. Dessy, Sylvain E., 2000. "A defense of compulsive measures against child labor," Journal of Development Economics, Elsevier, vol. 62(1), pages 261-275, June.
  12. Basu, Kaushik, 1998. "Child labor : cause, consequence, and cure, with remarks on International Labor Standards," Policy Research Working Paper Series 2027, The World Bank.
  13. Acemoglu, Daron, 1994. "Search in the Labour Market, Incomplete Contracts and Growth," CEPR Discussion Papers 1026, C.E.P.R. Discussion Papers.
  14. 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.
  15. 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.
  16. Matsuyama, Kiminori, 1996. "Why Are There Rich and Poor Countries? Symmetry-Breaking in the World Economy," Journal of the Japanese and International Economies, Elsevier, vol. 10(4), pages 419-439, December.
  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. 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.
  20. Stephen L. Parente & Edward C. Prescott, 1997. "Monopoly rights: a barrier to riches," Staff Report 236, Federal Reserve Bank of Minneapolis.
  21. 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, .
  22. 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.
  23. 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.
  24. Peter Howitt, 2000. "Endogenous Growth and Cross-Country Income Differences," American Economic Review, American Economic Association, vol. 90(4), pages 829-846, September.
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