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Mortality risks, education and child labor

  • Estevan, Fernanda
  • Baland, Jean-Marie

In this paper, we investigate the role of young adult mortality on child labour and educational decisions. We argue that mortality risks are a major source of risks in returns to education in developing countries. We show that, in the absence of appropriate insurance mechanisms, the level of child labour is inefficient, but it can be too high or too low. It is too high when parents are not very altruistic or anticipate positive transfers from their children in the future. Uncertain returns to education, endogenous mortality or imperfect capital markets unambiguously increase child labour. When the level of child labour is inefficiently high, we also show that a cash transfer conditional on child's schooling can always restore efficiency regarding child labour.

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Article provided by Elsevier in its journal Journal of Development Economics.

Volume (Year): 84 (2007)
Issue (Month): 1 (September)
Pages: 118-137

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Handle: RePEc:eee:deveco:v:84:y:2007:i:1:p:118-137
Contact details of provider: Web page: http://www.elsevier.com/locate/devec

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  1. Ravallion, Martin & Wodon, Quentin, 2000. "Does Child Labour Displace Schooling? Evidence on Behavioural Responses to an Enrollment Subsidy," Economic Journal, Royal Economic Society, vol. 110(462), pages C158-75, March.
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  4. Orley Ashenfelter & Colm Harmon & Hessel Oosterbeek, 2000. "A Review of Estimates of the Schooling/Earnings Relationship, with Tests for Publication Bias," NBER Working Papers 7457, National Bureau of Economic Research, Inc.
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  10. Jensen, Robert T., 2004. "Do private transfers 'displace' the benefits of public transfers? Evidence from South Africa," Journal of Public Economics, Elsevier, vol. 88(1-2), pages 89-112, January.
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  12. Anders Forslund & Oskar Nordström Stans, 2006. "Swedish Youth Labour Market Policies Revisited," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 75(3), pages 168-185.
  13. Cunha, Flavio & Heckman, James J. & Navarro, Salvador, 2004. "Separating Uncertainty from Heterogeneity in Life Cycle Earnings," IZA Discussion Papers 1437, Institute for the Study of Labor (IZA).
  14. Esther Duflo, 2000. "Schooling and Labor Market Consequences of School Construction in Indonesia: Evidence from an Unusual Policy Experiment," NBER Working Papers 7860, National Bureau of Economic Research, Inc.
  15. Edmonds, Eric V., 2006. "Child labor and schooling responses to anticipated income in South Africa," Journal of Development Economics, Elsevier, vol. 81(2), pages 386-414, December.
  16. Holger Strulik, 2002. "Child Mortality, Child Labour, and Economic Development," Quantitative Macroeconomics Working Papers 20205, Hamburg University, Department of Economics.
  17. De Vos, Susan, 1985. "An Old-Age Security Incentive for Children in the Philippines and Taiwan," Economic Development and Cultural Change, University of Chicago Press, vol. 33(4), pages 793-814, July.
  18. Bedi, Arjun S. & Gaston, Noel, 1999. "Using variation in schooling availability to estimate educational returns for Honduras," Economics of Education Review, Elsevier, vol. 18(1), pages 107-116, February.
  19. Basu, Kaushik & Van, Pham Hoang, 1998. "The Economics of Child Labor," American Economic Review, American Economic Association, vol. 88(3), pages 412-27, June.
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