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Household vulnerability and child labor: the effect of shocks, credit rationing, and insurance

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  • Lorenzo Guarcello
  • Fabrizia Mealli
  • Furio Rosati

    ()

Abstract

The theoretical literature has pointed at the importance of access to credit market in determining the household decisions concerning children's activities and the reaction of households to adverse shocks. In this paper we address these issues making use of a unique data set for Guatemala that contains information on credit rationing and shocks. We address the potential endogeneity of the variable of interest using a methodology based on propensity scores and we use sensitivity analysis to assess the robustness of the estimates with respect to unobservables. The results show the importance of access to credit markets and of shocks in determining children's labor supply.
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Suggested Citation

  • Lorenzo Guarcello & Fabrizia Mealli & Furio Rosati, 2010. "Household vulnerability and child labor: the effect of shocks, credit rationing, and insurance," Journal of Population Economics, Springer;European Society for Population Economics, vol. 23(1), pages 169-198, January.
    • Handle: RePEc:spr:jopoec:v:23:y:2010:i:1:p:169-198
    DOI: 10.1007/s00148-008-0233-4
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    References listed on IDEAS

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    1. Manski, Charles F, 1990. "Nonparametric Bounds on Treatment Effects," American Economic Review, American Economic Association, vol. 80(2), pages 319-323, May.
    2. Edmonds, Eric V., 2008. "Child Labor," Handbook of Development Economics, Elsevier.
    3. Becker, Gary S & Tomes, Nigel, 1976. "Child Endowments and the Quantity and Quality of Children," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages 143-162, August.
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    5. 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.
    6. Jalan, Jyotsna & Ravallion, Martin, 2003. "Estimating the Benefit Incidence of an Antipoverty Program by Propensity-Score Matching," Journal of Business & Economic Statistics, American Statistical Association, vol. 21(1), pages 19-30, January.
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    8. Heckman, James J. & Lalonde, Robert J. & Smith, Jeffrey A., 1999. "The economics and econometrics of active labor market programs," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 31, pages 1865-2097 Elsevier.
    9. Dehejia, Rajeev H. & Beegle, Kathleen & Gatti, Roberta, 2003. "Child labor, income shocks, and access to credit," Policy Research Working Paper Series 3075, The World Bank.
    10. Rajeev Dehejia & Roberta Gatti, 2002. "Child Labor: The Role of Income Variability and Access to Credit Across Countries," NBER Working Papers 9018, National Bureau of Economic Research, Inc.
    11. Cigno, Alessandro & Rosati, Furio Camillo, 2005. "The Economics of Child Labour," OUP Catalogue, Oxford University Press, number 9780199264452.
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    15. repec:ags:stataj:116022 is not listed on IDEAS
    16. Becker, Sascha O. & Ichino, Andrea, 2002. "Estimation of average treatment effects based on propensity scores," Stata Journal, StataCorp LP, vol. 0(Number 4), pages 1-20.
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    More about this item

    Keywords

    Child labor; Education; Credit rationing; Shocks; D1; O1;

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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