Considering the effects of poverty and schooling returns on child labour in Vietnam

This paper examines the effects of poverty and schooling returns on child labour in Vietnam using household-level data from the Vietnam Living Standards Survey (VLSS) for 1997-98. I find that poverty is a robust determinant of child labour in Vietnam. Being above the poverty line reduces child work by as much as 146 hours a year. There is little additional effect of further increases in income giving support to the idea that child non-work is a luxury good. Schooling returns are statistically significant but the effect on child work hours is small. Interestingly, higher returns in the urban area increase child work hours in adjoining rural regions. This result is consistent with a possibility of increasing returns to education and migration to urban centers for higher training, while remaining siblings work more to make up for the foregone earnings of the migrants and to perhaps pay for the added education expense. I do not find evidence of credit constraints affecting child hours.