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Child Labor, Idiosyncratic Shocks, and Social Policy

  • Alice Fabre

    ()

    (Aix Marseille University (Aix Marseille School of Economics), CNRS & EHESS)

  • Stéphane Pallage

    ()

    (CIRPEE and Département des Sciences Economiques, Université du Québec à Montréal)

In this paper, we provide a dynamic model with heterogeneous agents to study child labor in an economy with idiosyncratic shocks to employment. Households facing adverse shocks may use child labor as a buffer to smooth consumption. We show that the introduction of an unemployment insurance program and/or a universal basic income system help eliminate child labor endogenously in this context. A calibration to South Africa in the 1990s is provided.

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File URL: http://www.amse-aixmarseille.fr/sites/default/files/_dt/2012/wp_2013_-_nr_58.pdf
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Paper provided by Aix-Marseille School of Economics, Marseille, France in its series AMSE Working Papers with number 1358.

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Length: 32 pages
Date of creation: 05 Nov 2013
Date of revision: 05 Nov 2013
Handle: RePEc:aim:wpaimx:1358
Contact details of provider: Web page: http://www.amse-aixmarseille.fr/en

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