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Economic Well-Being and Child Labor: The Inter action of Family and Industry

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  • Claudia D. Goldin
  • Donald O. Parsons

Abstract

How did industrialization in the nineteenth century affect the well-being of children among American working class families? Two revealing surveys from 1890 and 1907 are used to examine the implications of child labor on schooling decisions and on possible offsetting intrafamily transfers, in the form of current "retained" earnings or future asset transfers. Both issues are analyzed within the context of a formal model of family labor supply, in which returns to schooling accrue after the youth has left the household and thus the interests of the parents and the child need not coincide. Parents working in the industries examined did not, it appears, compensate their children for the reduced future earnings implied by child labor, in either the current or in future time periods. But, in addition, the migration of families in which parental altruism was weak may have eliminated much of the apparent increase in family income due to higher child earnings. We end with a note reconciling our findings with the long term trend away from child labor.

Suggested Citation

  • Claudia D. Goldin & Donald O. Parsons, 1981. "Economic Well-Being and Child Labor: The Inter action of Family and Industry," NBER Working Papers 0707, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:0707
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    References listed on IDEAS

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    1. Arleen Leibowitz, 1974. "Home Investments in Children," NBER Chapters, in: Economics of the Family: Marriage, Children, and Human Capital, pages 432-456, National Bureau of Economic Research, Inc.
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    3. Sandell, Steven H, 1977. "Women and the Economics of Family Migration," The Review of Economics and Statistics, MIT Press, vol. 59(4), pages 406-414, November.
    4. Arleen Leibowitz, 1974. "Home Investments in Children," NBER Chapters, in: Marriage, Family, Human Capital, and Fertility, pages 111-135, National Bureau of Economic Research, Inc.
    5. Leibowitz, Arleen, 1974. "Home Investments in Children," Journal of Political Economy, University of Chicago Press, vol. 82(2), pages 111-131, Part II, .
    6. Ishikawa, Tsuneo, 1975. "Family Structures and Family Values in the Theory of Income Distribution," Journal of Political Economy, University of Chicago Press, vol. 83(5), pages 987-1008, October.
    7. Mincer, Jacob, 1978. "Family Migration Decisions," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 749-773, October.
    8. Lee Benham, 1974. "Benefits of Women's Education within Marriage," NBER Chapters, in: Economics of the Family: Marriage, Children, and Human Capital, pages 375-394, National Bureau of Economic Research, Inc.
    9. W. Lee Hansen, 1963. "Total and Private Rates of Return to Investment in Schooling," Journal of Political Economy, University of Chicago Press, vol. 71(2), pages 128-128.
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    13. Blinder, Alan S, 1976. "Intergenerational Transfers and Life Cycle Consumption," American Economic Review, American Economic Association, vol. 66(2), pages 87-93, May.
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    Cited by:

    1. Edmonds, Eric V., 2008. "Child Labor," Handbook of Development Economics, in: T. Paul Schultz & John A. Strauss (ed.), Handbook of Development Economics, edition 1, volume 4, chapter 57, pages 3607-3709, Elsevier.

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