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Why Children Work, Attend School, or Stay Idle: Theory and Evidence


  • Priya Ranjan


This paper offers a theoretical and empirical analysis of child labor, schooling, and `idleness' (neither work nor school), with particular emphasis on the roles of child ability and credit constraints in determining these decisions. We show theoretically that `idleness' may be chosen optimally by borrowing-constrained households whose child is of low ability. As well, children in the poorest households combine work and schooling if they are sufficiently able. Using a rich dataset from the Philippines, we find that while other factors--including mother's labor supply, the presence of a family business, and access to good school quality--contribute to these decisions, child ability and household wealth are the most important determinants of child idleness and the use of child labor. Our results suggest that the appropriate policy focus is not a ban on child labor, which may only increase the pool of idle children, in some cases by decreasing child schooling. Any policy aiming to reduce child labor and increase child schooling should also target improvements in child ability and cognitive development through investments in the nutrition and health of poor children

Suggested Citation

  • Priya Ranjan, 2004. "Why Children Work, Attend School, or Stay Idle: Theory and Evidence," Econometric Society 2004 Australasian Meetings 362, Econometric Society.
  • Handle: RePEc:ecm:ausm04:362

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    References listed on IDEAS

    1. H.E. Frech Iii & Sandra Hopkins & Garry Macdonald, 2003. "The Australian Private Health Insurance Boom: Was It Subsidies Or Liberalised Regulation?," Economic Papers, The Economic Society of Australia, vol. 22(1), pages 58-64, March.
    2. Cameron, A. Colin & Trivedi, Pravin K., 1991. "The role of income and health risk in the choice of health insurance : Evidence from Australia," Journal of Public Economics, Elsevier, vol. 45(1), pages 1-28, June.
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    Cited by:

    1. Holger Strulik, 2013. "School Attendance And Child Labor—A Model Of Collective Behavior," Journal of the European Economic Association, European Economic Association, vol. 11(2), pages 246-277, April.
    2. Cardoso, Ana Rute & Verner, Dorte, 2006. "School Drop-Out and Push-Out Factors in Brazil: The Role of Early Parenthood, Child Labor, and Poverty," IZA Discussion Papers 2515, Institute for the Study of Labor (IZA).
    3. Papa Seck, 2005. "Do Parents Favor their Biological Offspring over Adopted Orphans? Theory and Evidence from Tanzania," Economics Working Paper Archive at Hunter College 409, Hunter College Department of Economics.
    4. Epstein, Gil S. & Kahana, Nava, 2007. "The Effect of Emigration on Child Labor," IZA Discussion Papers 3025, Institute for the Study of Labor (IZA).
    5. Shunsuke Sakamoto, 2006. "Parental Attitudes toward Children and Child Labor: Evidence from Rural India," Hi-Stat Discussion Paper Series d05-136, Institute of Economic Research, Hitotsubashi University.

    More about this item


    child labor; schooling; idleness;

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply


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