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Child Labor and the Education of a Society

  • Bell, Clive

    ()

    (Heidelberg University)

  • Gersbach, Hans

    ()

    (ETH Zurich)

We examine economic growth, inequality and education when the wellspring of growth is the formation of human capital through a combination of the quality of child-rearing and formal schooling. The existence of multiple steady states is established, including a poverty trap, wherein children work full-time and no human capital accumulation takes place, with continuous growth at an asymptotically steady rate as an alternative. We show that a society can escape from the poverty trap into a condition of continuous growth through a program of taxes and transfers. Temporary inequality is a necessary condition to escape in finite time, but long-run inequalities are avoidable provided sufficiently heavy, but temporary taxes can be imposed on the better-off. Programs aiming simply at high attendance rates in the present can be strongly non-optimal.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 338.

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Length: 50 pages
Date of creation: Aug 2001
Date of revision:
Publication status: published in: Macroeconomic Dynamics, 2009, 12 (2), 220-249.
Handle: RePEc:iza:izadps:dp338
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  2. Galor, Oded & Weil, David, 1999. "From Malthusian Stagnation to Modern Growth," CEPR Discussion Papers 2082, C.E.P.R. Discussion Papers.
  3. Basu, Kaushik, 1998. "Child labor : cause, consequence, and cure, with remarks on International Labor Standards," Policy Research Working Paper Series 2027, The World Bank.
  4. Gersbach, Hans & Siemers, Lars, 2005. "Can Democracy Educate a Society?," IZA Discussion Papers 1693, Institute for the Study of Labor (IZA).
  5. Kenneth A. Swinnerton & Carol Ann Rogers, 1999. "The Economics of Child Labor: Comment," Labor and Demography 9903002, EconWPA.
  6. 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.
  7. Holger Strulik, 2002. "Child Mortality, Child Labour, and Economic Development," Quantitative Macroeconomics Working Papers 20205, Hamburg University, Department of Economics.
  8. Becker, Gary S & Murphy, Kevin M & Tamura, Robert, 1990. "Human Capital, Fertility, and Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S12-37, October.
  9. David N. Weil & Oded Galor, 2000. "Population, Technology, and Growth: From Malthusian Stagnation to the Demographic Transition and Beyond," American Economic Review, American Economic Association, vol. 90(4), pages 806-828, September.
  10. Rosenzweig, Mark R, 1990. "Population Growth and Human Capital Investments: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S38-70, October.
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  12. Matthias Doepke & Fabrizio Zilibotti, 2005. "The macroeconomics of child labor regulation," Staff Report 354, Federal Reserve Bank of Minneapolis.
  13. Pushkar Maitra & Ranjan Ray, 2000. "The Joint Estimation of Child Participation in Schooling and Employment: Comparative Evidence from Three Continents," ASARC Working Papers 2000-04, The Australian National University, Australia South Asia Research Centre.
  14. Dessy, Sylvain E., 2000. "A defense of compulsive measures against child labor," Journal of Development Economics, Elsevier, vol. 62(1), pages 261-275, June.
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  16. Bell, Clive & Gersbach, Hans, 2009. "Child Labor And The Education Of A Society," Macroeconomic Dynamics, Cambridge University Press, vol. 13(02), pages 220-249, April.
  17. Oded Galor & Omer Moav, 2004. "Das Human Kapital: A Theory of the Demise of the Class Structure," GE, Growth, Math methods 0410003, EconWPA.
  18. Dirk Krueger & Jessica Tjornhom Donohue, 2004. "On the Distributional Consequences of Child Labor Legislation," NBER Working Papers 10347, National Bureau of Economic Research, Inc.
  19. Moshe Hazan & Binyamin Berdugo, 2005. "Child Labor, Fertility and Economic Growth," Development and Comp Systems 0507002, EconWPA.
  20. Aumann, Robert J & Kurz, Mordecai, 1977. "Power and Taxes," Econometrica, Econometric Society, vol. 45(5), pages 1137-61, July.
  21. 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.
  22. Raut, L K & Srinivasan, T N, 1994. "Dynamics of Endogenous Growth," Economic Theory, Springer, vol. 4(5), pages 777-90, August.
  23. Ranjan, Priya, 1999. "An economic analysis of child labor," Economics Letters, Elsevier, vol. 64(1), pages 99-105, July.
  24. Ehrlich, Isaac & Lui, Francis T, 1991. "Intergenerational Trade, Longevity, and Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 99(5), pages 1029-59, October.
  25. Basu, Kaushik & Van, Pham Hoang, 1998. "The Economics of Child Labor," American Economic Review, American Economic Association, vol. 88(3), pages 412-27, June.
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