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Determinants of Child Labor and School Attendance: The Role of Household Unobservables

We develop a semi-parametric latent class random effects multinomial logit model to distinguish between observed and unobserved household characteristics as determinants of child labor, school attendance and idleness. We find that much of the substitution between activities as a response to changes in covariates is between attending school and being idle, with work being rather resistant. Unobserved household heterogeneity is substantial and swamps observed income and wealth heterogeneity. A characterization of households into latent types reveals very different instrinsic propensities towards the three children's activities and that households with a high propensity to send their children to school are poorer and have less educated parents compared to households in the other classes.

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File URL: http://econ.hunter.cuny.edu/wp-content/uploads/sites/6/RePEc/papers/HunterEconWP02-9.pdf
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Paper provided by Hunter College Department of Economics in its series Economics Working Paper Archive at Hunter College with number 02/9.

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Length: 33 pages
Date of creation: 2002
Date of revision:
Handle: RePEc:htr:hcecon:02/9
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  14. Browning, M. & Bourguignon, F. & Chiappori, P.A. & Lechene, V., 1992. "Incomes and Outcomes: A structural Model of Intra-Household Allocation," DELTA Working Papers 92-23, DELTA (Ecole normale supérieure).
  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 C158-75, March.
  16. Ranjan, P., 1999. ""Credit Constraints and the Phenomenon of Child Labor"," Papers 98-99-12, California Irvine - School of Social Sciences.
  17. Daniel McFadden & Kenneth Train, 2000. "Mixed MNL models for discrete response," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(5), pages 447-470.
  18. Deb, Partha & Trivedi, Pravin K., 2002. "The structure of demand for health care: latent class versus two-part models," Journal of Health Economics, Elsevier, vol. 21(4), pages 601-625, July.
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