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Child Labor, Idiosyncratic Shocks, and Social Policy

Listed author(s):
  • Alice Fabre

    ()

    (AMSE - Aix-Marseille School of Economics - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université - ECM - Ecole Centrale de Marseille - EHESS - École des hautes études en sciences sociales)

  • Stéphane Pallage

    (CIRPEE and Département des Sciences Economiques - UQAM - Université du Québec à Montréal)

In this paper, we provide a dynamic model with heterogeneous agents to study child labor in an economy with idiosyncratic shocks to employment. Households facing adverse shocks may use child labor as a buffer to smooth consumption. We show that the introduction of an unemployment insurance program and/or a universal basic income system help eliminate child labor endogenously in this context. A calibration to South Africa in the 1990s is provided.

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Paper provided by HAL in its series Working Papers with number halshs-00913666.

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Date of creation: Nov 2013
Handle: RePEc:hal:wpaper:halshs-00913666
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