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Mortality risks and child labor

  • Fernanda, ESTEVAN
  • Jean-Marie, BALAND

In this paper, we investigate the role of young adult mortality on child labor and educational decisions. We show that, in the absence of appropriate insurance mechanisms, the level of child labor is inefficient. It may be too high if parents are not very altruistic and anticipate positive transfers from their children in the future, but it can also be too low, in particular when parents expect to make positive transfers to their children in the future. Imperfect capital markets unambiguously increase the equilibrium level of child labor. We also show that a cash transfer conditional on child’s schooling can always restore efficiency regarding child labor.

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File URL: http://sites.uclouvain.be/econ/DP/IRES/2005-40.pdf
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Paper provided by Université catholique de Louvain, Département des Sciences Economiques in its series Discussion Papers (ECON - Département des Sciences Economiques) with number 2005040.

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Length: 17
Date of creation: 01 Jun 2005
Date of revision:
Handle: RePEc:ctl:louvec:2005040
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  1. Ravallion, Martin & Wodon, Quentin, 1999. "Does child labor displace schooling? - evidence on behavioral responses to an enrollment subsidy," Policy Research Working Paper Series 2116, The World Bank.
  2. George Psacharopoulos, 1997. "Child labor versus educational attainment Some evidence from Latin America," Journal of Population Economics, Springer, vol. 10(4), pages 377-386.
  3. Holger Strulik, 2004. "Child mortality, child labour and economic development," Economic Journal, Royal Economic Society, vol. 114(497), pages 547-568, 07.
  4. William Pouliot, 2003. "Introducing Uncertainty into Baland and Robinson's Model of Child Labour," Carleton Economic Papers 03-11, Carleton University, Department of Economics, revised Feb 2006.
  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. Eric V. Edmonds, 2004. "Does Illiquidity Alter Child Labor and Schooling Decisions? Evidence from Household Responses to Anticipated Cash Transfers in South Africa," NBER Working Papers 10265, National Bureau of Economic Research, Inc.
  7. Levhari, David & Weiss, Yoram, 1974. "The Effect of Risk on the Investment in Human Capital," American Economic Review, American Economic Association, vol. 64(6), pages 950-63, December.
  8. Razin, Assaf, 1976. "Lifetime Uncertainty, Human Capital and Physical Capital," Economic Inquiry, Western Economic Association International, vol. 14(3), pages 439-48, September.
  9. 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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