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What Happened to Child Labor in Indonesia during the Economic Crisis : The Trade-off between School and Work

  • Agus Priyambada

    (SMERU)

  • Asep Suryahadi
  • Sudarno Sumarto

Although in general less prevalent than other developing countries at similar stage of development, the problem of child labor in Indonesia is significant. Like in other countries, this study finds that there is a strong link between the child labor phenomenon and poverty. The profile of child labor largely mirrors the profile of poverty. Furthermore, poverty is found as an important determinant of working for children. However, working does not always completely eliminate a childs opportunity to obtain formal education. In fact, children from poor households can still go to school by undertaking part-time work to pay for their education, implying that banning working for these children may force them to drop out of schools instead. Since the phenomenon of child labor is strongly associated with and determined by poverty, the most effective policy for eliminating child labor is through poverty alleviation. Other policies that can foster the rate of reduction in child labor are to make it easier for children from poor families to access education and to increase the opportunity cost of working by improving the quality of education to increase the rate of return to education.

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Paper provided by East Asian Bureau of Economic Research in its series Labor Economics Working Papers with number 22535.

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Date of creation: Jan 2005
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Handle: RePEc:eab:laborw:22535
Contact details of provider: Postal: JG Crawford Building #13, Asia Pacific School of Economics and Government, Australian National University, ACT 0200
Web page: http://www.eaber.org

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  1. Black, Sandra E. & Devereux, Paul J. & Salvanes, Kjell G., 2003. "Why the Apple Doesn't Fall Far: Understanding Intergenerational Transmission of Human Capital," IZA Discussion Papers 926, Institute for the Study of Labor (IZA).
  2. Ranjan, P., 1999. ""Credit Constraints and the Phenomenon of Child Labor"," Papers 98-99-12, California Irvine - School of Social Sciences.
  3. 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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  5. Lisa A. Cameron, 2001. "The Impact of the Indonesian Financial Crisis on Children: An analysis using the 100 villages data," Papers inwopa01/10, Innocenti Working Papers.
  6. Canagarajah, Sudharshan & Coulombe, Harold, 1997. "Child labor and schooling in Ghana," Policy Research Working Paper Series 1844, The World Bank.
  7. Glewwe, Paul & Hall, Gillette, 1998. "Are some groups more vulnerable to macroeconomic shocks than others? Hypothesis tests based on panel data from Peru," Journal of Development Economics, Elsevier, vol. 56(1), pages 181-206, June.
  8. Blunch, Niels-Hugo & Verner, Dorte, 2000. "Revisiting the link between poverty and child labor - the Ghanaian experience," Policy Research Working Paper Series 2488, The World Bank.
  9. Dreze, Jean & Srinivasan, P. V., 1997. "Widowhood and poverty in rural India: Some inferences from household survey data," Journal of Development Economics, Elsevier, vol. 54(2), pages 217-234, December.
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  12. Arnaud Chevalier, 2004. "Parental Education and Child’s Education - A Natural Experiment," Working Papers 200414, School of Economics, University College Dublin.
  13. Asep Suryahadi & Wenefrida Widyanti & Sudarno Sumarto, 2003. "Short-term poverty dynamics in rural Indonesia during the economic crisis," Journal of International Development, John Wiley & Sons, Ltd., vol. 15(2), pages 133-144.
  14. 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.
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  16. Cameron, Lisa A., 2002. "Did social safety net scholarships reduce drop-out rates during the Indonesian economic crisis?," Policy Research Working Paper Series 2800, The World Bank.
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