Psychological impacts of child labour in Punjab: An application of fairlie decomposition analysis

Child labour is among the most vulnerable groups, often a contributor and a driver of poverty, with the impact leads to serious consequences that can persist into adulthood. Physical harms of child labour are well documented but there is little empirical literature on the effects of child labour on various dimensions of Psychological Health Problems (PHPs). This paper examines a largely neglected potential consequence of child labour on the PHPs recognized in the theory. The study used five dimensions of PHPs from the latest data set of Punjab’s Child Labour Survey (PCLS 2019–20). Descriptive statistics were used to understand the gap in having PHPs between child labourers (CLs) and non-child labourers (NCLs) across selected covariates using multivariable binary logistic regression (average marginal effects) and Fairlie decomposition techniques. The logistics regression results indicated that CLs are more likely to fall in PHPs as compare to NCLs. The Fairlie decomposition analysis shows that child abuse, child schooling, mother & household head’s education and household wealth status are the significant contributors in explaining the gap of PHPs between the two groups of our study. Child abuse accounts for 53.91% of the mental health gap between CLs and NCLs, indicating it as a major contributor to the disparity. The gap of PHPs can be reduced up to 22.47% if the distribution of different wealth quintiles of the CLs is identical to the NCLs. Addressing the issue of PHPs among children will require a sustained effort by the government, civil society, and international partners, with a particular focus on working children, those lower education backgrounds, and belongs to poor households and underdeveloped segments.