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Child labor and household wealth: Theory and empirical evidence of an inverted-U

  • Kaushik Basu

    ()

    (Indian Statistical Institute, New Delhi)

  • Sanghamitra Das

    ()

    (Indian Statistical Institute, New Delhi)

  • Bhaskar Dutta

    ()

    (Department of Economics, Warwick University, Coventry)

Some studies on child labor have shown that greater land wealth leads to higher child labor, thereby casting doubt on the hypothesis that child labor is caused by poverty. This paper argues that the missing ingredient is an explicit modeling of the labor market. We develop a simple model which suggests an inverted-U relationship between land holdings and child labor. A unique data set from India that has child labor hours information confirms this hypothesis. It is shown that the turning point beyond which more land leads to a decline in child labor occurs at 3.6 acres of land per household, which is well below the observed maximum value of and-holding.

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File URL: http://www.isid.ac.in/~pu/dispapers/dp07-01.pdf
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Paper provided by Indian Statistical Institute, New Delhi, India in its series Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers with number 07-01.

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Length: 21 pages
Date of creation: Feb 2007
Date of revision:
Handle: RePEc:ind:isipdp:07-01
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  1. Basu, Kaushik & Tzannatos, Zafiris, 2003. "The Global Child Labor Problem: What Do We Know and What Can We Do?," Working Papers 03-06, Cornell University, Center for Analytic Economics.
  2. 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.
  3. Edmonds, Eric & Turk, Carrie, 2002. "Child labor in transition in Vietnam," Policy Research Working Paper Series 2774, The World Bank.
  4. Eric V. Edmonds, 2003. "Does Child Labor Decline with Improving Economic Status?," NBER Working Papers 10134, National Bureau of Economic Research, Inc.
  5. Basu, Kaushik & Van, Pham Hoang, 1998. "The Economics of Child Labor," American Economic Review, American Economic Association, vol. 88(3), pages 412-27, June.
  6. Christelle Dumas, 2007. "Why do parents make their children work? A test of the poverty hypothesis in rural areas of Burkina Faso," Oxford Economic Papers, Oxford University Press, vol. 59(2), pages 301-329, April.
  7. Marco Manacorda, 2006. "Child Labor and the Labor Supply of Other Household Members: Evidence from 1920 America," American Economic Review, American Economic Association, vol. 96(5), pages 1788-1801, December.
  8. Mueller, Eva, 1984. "The value and allocation of time in rural Botswana," Journal of Development Economics, Elsevier, vol. 15(1-3), pages 329-360.
  9. Baland, J.M. & Robinson, J.A., 1998. "A Model of Child Labor," Papers 9803, Southern California - Department of Economics.
  10. Bardhan, Pranab & Udry, Christopher, 1999. "Development Microeconomics," OUP Catalogue, Oxford University Press, number 9780198773719, March.
  11. 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.
  12. Edmonds, Eric V., 2008. "Child Labor," Handbook of Development Economics, Elsevier.
  13. Kaushik Basu, 1999. "Child Labor: Cause, Consequence, and Cure, with Remarks on International Labor Standards," Journal of Economic Literature, American Economic Association, vol. 37(3), pages 1083-1119, September.
  14. Jacoby, H.G., 1990. "Shadow Wages And Peasant Family Labor Supply; An Econometric Application To The Peruvian Sierra," Papers 73, World Bank - Living Standards Measurement.
  15. Bhalotra, Sonia & Heady, Christopher, 2001. "Child farm labour : the wealth paradox," Social Protection Discussion Papers 24088, The World Bank.
  16. Matthias Doepke & Fabrizio Zilibotti, 2005. "The macroeconomics of child labor regulation," Staff Report 354, Federal Reserve Bank of Minneapolis.
  17. Foster, Andrew D & Rosenzweig, Mark R, 1994. "A Test for Moral Hazard in the Labor Market: Contractual Arrangements, Effort, and Health," The Review of Economics and Statistics, MIT Press, vol. 76(2), pages 213-27, May.
  18. 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.
  19. Eric V. Edmonds & Nina Pavcnik, 2005. "Child Labor in the Global Economy," Journal of Economic Perspectives, American Economic Association, vol. 19(1), pages 199-220, Winter.
  20. Foster, Andrew D. & Rosenzweig, Mark R., 2004. "Technological change and the distribution of schooling: evidence from green-revolution India," Journal of Development Economics, Elsevier, vol. 74(1), pages 87-111, June.
  21. Chernichovsky, Dov, 1985. "Socioeconomic and Demographic Aspects of School Enrollment and Attendance in Rural Botswana," Economic Development and Cultural Change, University of Chicago Press, vol. 33(2), pages 319-32, January.
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