IDEAS home Printed from
MyIDEAS: Login to save this paper or follow this series

Is Child Work Necessary?

  • Sonia Bhalotra

    (University of Cambridge)

This paper investigates whether the income from child wage work is necessary to the survival of rural households in Pakistan. It is by no means obvious that it is. For instance, children may work because the returns to work exceed the returns to school, or because parents are selfish or short-sighted. It is argued here that, if child work is necessary, then the income effect of a wage change will dominate the substitution effect and the labour supply curve will be "forward falling" or negatively sloped at low wages. Existing studies have concentrated on the income elasticity, but this tells us nothing other than that leisure is a normal good. Studying the wage elasticity, however, permits us to infer from behavioural responses whether or not a household is at a subsistence level of income. Structural labour supply models for boys and girls are estimated, conditioning on full income and a range of demographic variables. We cannot reject the hypothesis that child work is necessary in the first quartile of the expenditure distribution. This suggests that trade sanctions or bans on child labour may be undesirable in the short run unless households are compensated for the loss in income. On the other hand, policies targeted at alleviating poverty or liquidity constraints are likely to reduce the prevalence of child work.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
File Function: main text
Download Restriction: no

Paper provided by Econometric Society in its series Econometric Society World Congress 2000 Contributed Papers with number 0500.

in new window

Date of creation: 01 Aug 2000
Date of revision:
Handle: RePEc:ecm:wc2000:0500
Contact details of provider: Phone: 1 212 998 3820
Fax: 1 212 995 4487
Web page:

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. 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.
  2. Basu, Kaushik, 2001. "Gender and Say: A Model of Household Behavior with Endogenously-Determined Balance of Power," Working Papers 01-01, Cornell University, Center for Analytic Economics.
  3. Jere R. Behrman & Andrew D. Foster & Mark R. Rosenzweig & Prem Vashishtha, 1999. "Women's Schooling, Home Teaching, and Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 107(4), pages 682-714, August.
  4. Newey, Whitney K & Powell, James L & Walker, James R, 1990. "Semiparametric Estimation of Selection Models: Some Empirical Results," American Economic Review, American Economic Association, vol. 80(2), pages 324-28, May.
  5. Glewwe, P. & Jacoby, H., 1993. "Delayed Primary School Enrollment and Childhood Malnutrition in Ghana, an Economic Analysis," Papers 98, World Bank - Living Standards Measurement.
  6. Kooreman, P. & Kapteyn, A.J., 1984. "Estimation of rationed and unrationed household labor supply functions using flexible functional forms," Research Memorandum FEW 157, Tilburg University, School of Economics and Management.
  7. Basu, Kaushik & Van, Pham Hoang, 1998. "The Economics of Child Labor," American Economic Review, American Economic Association, vol. 88(3), pages 412-27, June.
  8. Bhargava, Alok & Sargan, J D, 1983. "Estimating Dynamic Random Effects Models from Panel Data Covering Short Time Periods," Econometrica, Econometric Society, vol. 51(6), pages 1635-59, November.
  9. Peter Jensen & Helena Skyt Nielsen, 1997. "Child labour or school attendance? Evidence from Zambia," Journal of Population Economics, Springer, vol. 10(4), pages 407-424.
  10. Blundell, Richard & Ham, John & Meghir, Costas, 1987. "Unemployment and Female Labour Supply," Economic Journal, Royal Economic Society, vol. 97(388a), pages 44-64, Supplemen.
  11. Joseph Altonji, 1984. "Intertemporal Substitution in Labor Supply: Evidence from Micro Data," Working Papers 562, Princeton University, Department of Economics, Industrial Relations Section..
  12. Rosenzweig, Mark R & Evenson, Robert E, 1977. "Fertility, Schooling, and the Economic Contribution of Children in Rural India: An Econometric Analysis," Econometrica, Econometric Society, vol. 45(5), pages 1065-79, July.
  13. Kaushik Basu & Zafiris Tzannatos, 2003. "The Global Child Labor Problem: What Do We Know and What Can We Do?," World Bank Economic Review, World Bank Group, vol. 17(2), pages 147-173, December.
  14. Jacoby, Hanan G & Skoufias, Emmanuel, 1997. "Risk, Financial Markets, and Human Capital in a Developing Country," Review of Economic Studies, Wiley Blackwell, vol. 64(3), pages 311-35, July.
  15. Grootaert, Christiaan & Kanbur, Ravi, 1995. "Child labor : a review," Policy Research Working Paper Series 1454, The World Bank.
  16. David Card, 1994. "Earnings, Schooling, and Ability Revisited," Working Papers 710, Princeton University, Department of Economics, Industrial Relations Section..
  17. Fortin, B. & Lacroix, G., 1993. "A Test of the Neoclassical and Collective Models of Household Labour Supply," Papers 9335, Laval - Recherche en Politique Economique.
  18. Edmonds, Eric V., 2007. "Child Labor," IZA Discussion Papers 2606, Institute for the Study of Labor (IZA).
  19. Skoufias, Emmanuel & Parker, Susan W., 2001. "Conditional cash transfers and their impact on child work and schooling," FCND briefs 123, International Food Policy Research Institute (IFPRI).
  20. Blundell, Richard & Macurdy, Thomas, 1999. "Labor supply: A review of alternative approaches," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 27, pages 1559-1695 Elsevier.
  21. Basu, Kaushik, 1998. "Child labor : cause, consequence, and cure, with remarks on International Labor Standards," Policy Research Working Paper Series 2027, The World Bank.
  22. Mroz, Thomas A, 1987. "The Sensitivity of an Empirical Model of Married Women's Hours of Work to Economic and Statistical Assumptions," Econometrica, Econometric Society, vol. 55(4), pages 765-99, July.
  23. Canagarajah, Sudharshan & Coulombe, Harold, 1997. "Child labor and schooling in Ghana," Policy Research Working Paper Series 1844, The World Bank.
  24. Nelson, C. & Startz, R., 1988. "The Distribution Of The Instrumental Variables Estimator And Its T-Ratio When The Instrument Is A Poor One," Discussion Papers in Economics at the University of Washington 88-07, Department of Economics at the University of Washington.
  25. Gary S. Becker & Nigel Tomes, 1994. "Human Capital and the Rise and Fall of Families," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education (3rd Edition), pages 257-298 National Bureau of Economic Research, Inc.
  26. Sonia Bhalotra & Chris Heady, 2000. "Child farm labour: theory and evidence," LSE Research Online Documents on Economics 6654, London School of Economics and Political Science, LSE Library.
  27. Geeta Gandhi Kingdon, 1997. "Does the Labour Market Explain Lower Female Schooling in India?," STICERD - Development Economics Papers - From 2008 this series has been superseded by Economic Organisation and Public Policy Discussion Papers 01, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
  28. 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.
  29. Kniesner, Thomas J, 1976. "An Indirect Test of Complementarity in a Family Labor Supply Model," Econometrica, Econometric Society, vol. 44(4), pages 651-69, July.
  30. Drusilla K. Brown & Alan V. Deardorff & Robert M. Stern, 2001. "Child Labor: Theory, Evidence and Policy," Discussion Papers Series, Department of Economics, Tufts University 0111, Department of Economics, Tufts University.
  31. Alan Krueger, 1996. "Observations on International Labor Standards and Trade," Working Papers 741, Princeton University, Department of Economics, Industrial Relations Section..
  32. Gupta, Manash Ranjan, 2000. "Wage Determination of a Child Worker: A Theoretical Analysis," Review of Development Economics, Wiley Blackwell, vol. 4(2), pages 219-28, June.
  33. Saqib Jafarey & Sajal Lahiri, 1999. "Will trade sanctions reduce child labour? The role of credit markets," Economics Discussion Papers 500, University of Essex, Department of Economics.
  34. Pencavel, John, 1987. "Labor supply of men: A survey," Handbook of Labor Economics, in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 1, chapter 1, pages 3-102 Elsevier.
  35. George Psacharopoulos & Harry Anthony Patrinos, 1997. "Family size, schooling and child labor in Peru - An empirical analysis," Journal of Population Economics, Springer, vol. 10(4), pages 387-405.
  36. George Psacharopoulos, 1997. "Child labor versus educational attainment Some evidence from Latin America," Journal of Population Economics, Springer, vol. 10(4), pages 377-386.
  37. Meghir, Costas & Phillips, David, 2008. "Labour Supply and Taxes," IZA Discussion Papers 3405, Institute for the Study of Labor (IZA).
  38. Barzel, Yoram & McDonald, Richard J, 1973. "Assets, Subsistence, and The Supply Curve of Labor," American Economic Review, American Economic Association, vol. 63(4), pages 621-33, September.
  39. Heckman, James J & Macurdy, Thomas E, 1980. "A Life Cycle Model of Female Labour Supply," Review of Economic Studies, Wiley Blackwell, vol. 47(1), pages 47-74, January.
  40. Sonia Bhalotra, 2003. "Child Labour in Africa," OECD Social, Employment and Migration Working Papers 4, OECD Publishing.
  41. Nielsen, H.S., 1998. "Child Labor and School Attendance: Two Joint Decisions," Papers 98-15, Centre for Labour Market and Social Research, Danmark-.
  42. Patrick M. Emerson & Andre Portela Souza, 2002. "Is There a Child Labor Trap? Inter-Generational Persistence of Child Labor in Brazil," Vanderbilt University Department of Economics Working Papers 0214, Vanderbilt University Department of Economics.
  43. Swaminathan, Madhura, 1998. "Economic growth and the persistence of child labor: Evidence from an Indian city," World Development, Elsevier, vol. 26(8), pages 1513-1528, August.
  44. Parsons, Donald O & Goldin, Claudia, 1989. "Parental Altruism and Self-Interest: Child Labor among Late Nineteenth-Century American Families," Economic Inquiry, Western Economic Association International, vol. 27(4), pages 637-59, October.
  45. Case, Anne & Lin, I-Fen & McLanahan, Sara, 2000. "How Hungry Is the Selfish Gene?," Economic Journal, Royal Economic Society, vol. 110(466), pages 781-804, October.
  46. 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.
  47. Heckman, James J, 1974. "Shadow Prices, Market Wages, and Labor Supply," Econometrica, Econometric Society, vol. 42(4), pages 679-94, July.
  48. Bhargava, Alok, 1991. "Identification and Panel Data Models with Endogenous Regressors," Review of Economic Studies, Wiley Blackwell, vol. 58(1), pages 129-40, January.
  49. Fortin, Bernard & Lacroix, Guy, 1997. "A Test of the Unitary and Collective Models of Household Labour Supply," Economic Journal, Royal Economic Society, vol. 107(443), pages 933-55, July.
  50. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-38, May.
  51. Bhalotra, Sonia, 2002. "Parent Altruism," Royal Economic Society Annual Conference 2002 25, Royal Economic Society.
  52. Simon Appleton, 2000. "Education and health at the household level in sub-Saharan Africa," CID Working Papers 33, Center for International Development at Harvard University.
  53. Douglas Staiger & James H. Stock, 1994. "Instrumental Variables Regression with Weak Instruments," NBER Technical Working Papers 0151, National Bureau of Economic Research, Inc.
  54. Dehejia, Rajeev H. & Beegle, Kathleen & Gatti, Roberta, 2003. "Child labor, income shocks, and access to credit," Policy Research Working Paper Series 3075, The World Bank.
  55. Shahnaz Hamid, 1994. "A Micro Analysis of Urban Child Labour: Some Determinants of Labour and its Conditions," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 33(4), pages 1249-1271.
  56. Levy, Victor, 1985. "Cropping Pattern, Mechanization, Child Labor, and Fertility Behavior in a Farming Economy: Rural Egypt," Economic Development and Cultural Change, University of Chicago Press, vol. 33(4), pages 777-91, July.
  57. Martin Shubik, 2001. "On Understanding Money," World Economics, World Economics, Economic & Financial Publishing, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 2(1), pages 95-120, January.
  58. Baland, J.M. & Robinson, J.A., 1998. "A Model of Child Labor," Papers 206, Notre-Dame de la Paix, Sciences Economiques et Sociales.
  59. Ranjan Ray, 2000. "Analysis of child labour in Peru and Pakistan: A comparative study," Journal of Population Economics, Springer, vol. 13(1), pages 3-19.
  60. Ranjan, Priya, 1999. "An economic analysis of child labor," Economics Letters, Elsevier, vol. 64(1), pages 99-105, July.
  61. Emmanuel Skoufias & Susan Wendy Parker, 2001. "Conditional Cash Transfers and Their Impact on Child Work and Schooling: Evidence from the PROGRESA Program in Mexico," ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, August.
  62. Jolliffe, Dean, 1997. "Whose education matters in the determination of household income," FCND discussion papers 39, International Food Policy Research Institute (IFPRI).
  63. Blundell, Richard & Walker, Ian, 1986. "A Life-Cycle Consistent Empirical Model of Family Labour Supply Using Cross-Section Data," Review of Economic Studies, Wiley Blackwell, vol. 53(4), pages 539-58, August.
  64. 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 347-67, May.
  65. Rosenzweig, Mark R, 1980. "Neoclassical Theory and the Optimizing Peasant: An Econometric Analysis of Market Family Labor Supply in a Developing Country," The Quarterly Journal of Economics, MIT Press, vol. 94(1), pages 31-55, February.
  66. Sonia Bhalotra, and Zafiris Tzannatos, 2003. "Child labor : what have we learnt?," Social Protection Discussion Papers 27872, The World Bank.
  67. Douglas A. Galbi, 1997. "Child labor and the division of labor in the early English cotton mills," Journal of Population Economics, Springer, vol. 10(4), pages 357-375.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:ecm:wc2000:0500. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F. Baum)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.