Returns to farm child labor in Tanzania

In developing countries, the opportunity costs of children’s time can significantly hinder universal education. This paper studies one of these opportunity costs: we estimate the agricultural productivity of children aged 10 to 15 years old using the LSMS-ISA panel survey in Tanzania. Since child labor can be endogenous, we exploit the panel structure of the data and instrument child labor with changes in the age composition of the household. One day of child work leads to an increase in production value by roughly US$0.89. Children enrolled in school work 26 fewer days than nonenrolled children. Compensating enrolled children for loss in income can be accomplished with monthly payments of $1.92. However, a complete simulation of a hypothetical conditional cash transfer shows that even $10/month transfers would fail to achieve universal school enrollment of children aged 10 to 15 years old.