IDEAS home Printed from
   My bibliography  Save this article

A Dynamic Analysis of Child Labor with a Variable Rate of Discount: Some Policy Implications


  • Das Satya P

    () (Indian Statistical Institute, Delhi)

  • Deb Rajat

    () (Southern Methodist University)


This paper analyzes the problem of child labor in an infinite-horizon dynamic model with a variable rate of time preference and credit constraints. The variability in the rate of time preference leads to the possibility of multiple steady states and a poverty trap. The paper considers the long-run and short-run effects of an array of policies like enrollment subsidy, improvement in primary education infrastructure, lump-sum subsidy, and variations in loan market parameters. We distinguish between policies that reduce child labor in the long run only in the presence of a variable discount rate and other policies which work whether or not the discount rate is variable. Credit-related policies belong to the former group. Policies that reduce child labor and increase family consumption in the long run may have an adverse effect of lowering consumption in the short run.

Suggested Citation

  • Das Satya P & Deb Rajat, 2006. "A Dynamic Analysis of Child Labor with a Variable Rate of Discount: Some Policy Implications," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(1), pages 1-30, August.
  • Handle: RePEc:bpj:bejeap:v:contributions.5:y:2006:i:1:n:25

    Download full text from publisher

    File URL:
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.

    As the access to this document is restricted, you may want to search for a different version of it.


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Edmonds, Eric V., 2008. "Child Labor," Handbook of Development Economics, Elsevier.
    2. repec:zbw:espost:178614 is not listed on IDEAS
    3. Marco A Espinosa-Vega & Richard C. Barnett, 2005. "Barriers to Capital Accumulation and the Incidence of Child Labor," IMF Working Papers 05/220, International Monetary Fund.
    4. repec:nwe:eajour:y:2018:i:3:p:348-372 is not listed on IDEAS

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:bejeap:v:contributions.5:y:2006:i:1:n:25. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Golla). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.