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


  • Agus Priyambada


  • 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.

Suggested Citation

  • Agus Priyambada & Asep Suryahadi & Sudarno Sumarto, 2005. "What Happened to Child Labor in Indonesia during the Economic Crisis : The Trade-off between School and Work," Labor Economics Working Papers 22535, East Asian Bureau of Economic Research.
  • Handle: RePEc:eab:laborw:22535

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    References listed on IDEAS

    1. Edmonds, Eric V., 2008. "Child Labor," Handbook of Development Economics, Elsevier.
    2. Lisa Cameron, 2001. "The Impact Of The Indonesian Financial Crisis On Children: An Analysis Using The 100 Villages Data," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 37(1), pages 43-64.
    3. Canagarajah, Sudharshan & Coulombe, Harold, 1997. "Child labor and schooling in Ghana," Policy Research Working Paper Series 1844, The World Bank.
    4. Ranjan, Priya, 2001. "Credit constraints and the phenomenon of child labor," Journal of Development Economics, Elsevier, vol. 64(1), pages 81-102, February.
    5. Alan B. Krueger, 1996. "Observations on International Labor Standards and Trade," NBER Working Papers 5632, National Bureau of Economic Research, Inc.
    6. Sandra E. Black & Paul J. Devereux & Kjell G. Salvanes, 2005. "Why the Apple Doesn't Fall Far: Understanding Intergenerational Transmission of Human Capital," American Economic Review, American Economic Association, vol. 95(1), pages 437-449, March.
    7. Arnaud Chevalier, 2004. "Parental Education and Childs Education: A Natural Experiment," CEE Discussion Papers 0040, Centre for the Economics of Education, LSE.
    8. Ray, Ranjan, 2000. "Child Labor, Child Schooling, and Their Interaction with Adult Labor: Empirical Evidence for Peru and Pakistan," World Bank Economic Review, World Bank Group, vol. 14(2), pages 347-367, May.
    9. 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.
    10. 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.
    11. 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.
    12. 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.
    13. 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.
    14. 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.
    15. 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 158-175, March.
    16. Asep Suryahadi & Sudarno Sumarto, 2003. "Poverty and Vulnerability in Indonesia Before and After the Economic Crisis," Asian Economic Journal, East Asian Economic Association, vol. 17(1), pages 45-64, March.
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    Cited by:

    1. Ariane Utomo & Anna Reimondos & Iwu Utomo & Peter McDonald & Terence H. Hull, 2014. "What happens after you drop out? Transition to adulthood among early school-leavers in urban Indonesia," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 30(41), pages 1189-1218, April.
    2. repec:lpe:efijnl:201614 is not listed on IDEAS
    3. Muhamad Purnagunawan & Victor Pirmana, 2013. "Labor market development in Indonesia Has it been for all?," Working Papers in Economics and Development Studies (WoPEDS) 201317, Department of Economics, Padjadjaran University, revised Jul 2013.
    4. Kharisma, Bayu, 2017. "Idiosyncratic Shocks, Child Labor and School Attendance in Indonesia," MPRA Paper 78887, University Library of Munich, Germany, revised 06 Apr 2017.
    5. Sumarto, Sudarno & de Silva, Indunil, 2013. "Education Transfers, expenditures and child labour supply in Indonesia: An evaluationof impacts and flypaper effects," MPRA Paper 57132, University Library of Munich, Germany.

    More about this item


    child; labour;

    JEL classification:

    • J78 - Labor and Demographic Economics - - Labor Discrimination - - - Public Policy (including comparable worth)
    • J70 - Labor and Demographic Economics - - Labor Discrimination - - - General
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement


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