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Child Labor And The Education Of A Society

We examine economic growth, inequality and education when the wellspring of growth is the formation of human capital through a combination of the quality of child-rearing and formal schooling. The existence of multiple steady states is established, including a poverty trap, wherein children work full-time and no human capital accumulation takes place, with continuous growth at an asymptotically steady rate as an alternative. We show that a society can escape from the poverty trap into a condition of continuous growth through a program of taxes and transfers. Temporary inequality is a necessary condition to escape in finite time, but long-run inequalities are avoidable provided sufficiently heavy, but temporary taxes can be imposed on the better-off. Programs aiming simply at high attendance rates in the present can be strongly non-optimal.

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Article provided by Cambridge University Press in its journal Macroeconomic Dynamics.

Volume (Year): 13 (2009)
Issue (Month): 02 (April)
Pages: 220-249

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Handle: RePEc:cup:macdyn:v:13:y:2009:i:02:p:220-249_08
Contact details of provider: Postal: Cambridge University Press, UPH, Shaftesbury Road, Cambridge CB2 8BS UK
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  17. Ranjan, Priya, 1999. "An economic analysis of child labor," Economics Letters, Elsevier, vol. 64(1), pages 99-105, July.
  18. Patrick M. Emerson & Andre Portela Souza, 2002. "Is There a Child Labor Trap? Inter-Generational Persistence of Child Labor in Brazil," Vanderbilt University Department of Economics Working Papers 0214, Vanderbilt University Department of Economics.
  19. Galor, Oded & Weil, David, 1999. "From Malthusian Stagnation to Modern Growth," CEPR Discussion Papers 2082, C.E.P.R. Discussion Papers.
  20. Moshe Hazan & Binyamin Berdugo, 2002. "Child Labour, Fertility, and Economic Growth," Economic Journal, Royal Economic Society, vol. 112(482), pages 810-828, October.
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