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Child Labor and the Labor Supply of Other Household Members: Evidence from 1920 America

This paper analyses the effect of child labor on household labor supply using 1920 US Census micro data. The aim of the analysis is to understand who in the household benefits from child labor. In order to identify a source of exogenous variation in child labor I use State-specific child labor laws. I find that a rise in the proportion of working children by household is associated with no variation in parents' labor supply. I also find a strong negative externality among children: as the proportion of working children by household rises, everything else equal, the probability that each child works falls while the probability that he attends school rises. This suggests that parents redistribute entirely the returns from child labor to the children in the household, consistent with a model of household labor supply with fully altruistic parents.

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File URL: http://www.econ.qmul.ac.uk/papers/doc/wp504.pdf
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Paper provided by Queen Mary University of London, School of Economics and Finance in its series Working Papers with number 504.

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Date of creation: Dec 2003
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Handle: RePEc:qmw:qmwecw:wp504
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  1. Joshua D. Angrist & Alan B. Krueger, 1990. "Does Compulsory School Attendance Affect Schooling and Earnings?," NBER Working Papers 3572, National Bureau of Economic Research, Inc.
  2. Claudia Goldin & Kenneth Sokoloff, 1981. "Women, Children, and Industrialization in the Early Republic: Evidence from the Manufacturing Censuses," UCLA Economics Working Papers 220, UCLA Department of Economics.
  3. Goldin, Claudia, 1999. "Egalitarianism and the Returns to Education during the Great Transformation of American Education," Scholarly Articles 2623652, Harvard University Department of Economics.
  4. Alan B. Krueger, 1996. "Observations on International Labor Standards and Trade," NBER Working Papers 5632, National Bureau of Economic Research, Inc.
  5. Matthias Doepke & Fabrizio Zilibotti, 2005. "The macroeconomics of child labor regulation," Staff Report 354, Federal Reserve Bank of Minneapolis.
  6. Sanderson, Allen R., 1974. "Child-Labor Legislation and the Labor Force Participation of Children," The Journal of Economic History, Cambridge University Press, vol. 34(01), pages 297-299, March.
  7. Basu, Kaushik & Van, Pham Hoang, 1998. "The Economics of Child Labor," American Economic Review, American Economic Association, vol. 88(3), pages 412-27, June.
  8. Ashenfelter, Orley, 1980. "Unemployment as Disequilibrium in a Model of Aggregate Labor Supply," Econometrica, Econometric Society, vol. 48(3), pages 547-64, April.
  9. Margo, Robert A. & Aldrich Finegan, T., 1996. "Compulsory schooling legislation and school attendance in turn-of-the century America: A 'natural experiment' approach," Economics Letters, Elsevier, vol. 53(1), pages 103-110, October.
  10. Thomas, D., 1995. "Like Father, Like Son, Like Mother, Like Daughter, Parental Resources and Child Height," Papers 95-01, RAND - Reprint Series.
  11. Claudia Goldin & Lawrence F. Katz, 1999. "Education and Income in the Early 20th Century: Evidence from the Prairies," NBER Working Papers 7217, National Bureau of Economic Research, Inc.
  12. Deaton,Angus & Muellbauer,John, 1980. "Economics and Consumer Behavior," Cambridge Books, Cambridge University Press, number 9780521296762, November.
  13. Chiappori, P.A., 1989. "Collective Labour Supply and Welfare," DELTA Working Papers 89-07, DELTA (Ecole normale supérieure).
  14. Moehling, Carolyn M., 1999. "State Child Labor Laws and the Decline of Child Labor," Explorations in Economic History, Elsevier, vol. 36(1), pages 72-106, January.
  15. Thomas, D., 1989. "Intra-Household Resource Allocation: An Inferential Approach," Papers 586, Yale - Economic Growth Center.
  16. Goldin, Claudia & Katz, Lawrence F, 1996. "Technology, Skill, and the Wage Structure: Insights from the Past," American Economic Review, American Economic Association, vol. 86(2), pages 252-57, May.
  17. repec:pri:indrel:362 is not listed on IDEAS
  18. Claudia Goldin & Lawrence F. Katz, 1998. "The Origins of Technology-Skill Complementarity," The Quarterly Journal of Economics, Oxford University Press, vol. 113(3), pages 693-732.
  19. Orley C Ashenfelter & James Heckman, 1971. "The Estimation of Income and Substitution Effects in a Model of Family Labor Supply," Working Papers 402, Princeton University, Department of Economics, Industrial Relations Section..
  20. Michael A. Boozer & Alan B. Krueger & Shari Wolkon, 1992. "Race and School Quality Since Brown vs. Board of Education," NBER Working Papers 4109, National Bureau of Economic Research, Inc.
  21. Landes, William M. & Solmon, Lewis C., 1972. "Compulsory Schooling Legislation: An Economic Analysis of Law and Social Change in the Nineteenth Century," The Journal of Economic History, Cambridge University Press, vol. 32(01), pages 54-91, March.
  22. Cullen, Julie Berry & Gruber, Jonathan, 2000. "Does Unemployment Insurance Crowd Out Spousal Labor Supply?," Journal of Labor Economics, University of Chicago Press, vol. 18(3), pages 546-72, July.
  23. Joseph G. Altonji & Fumio Hayashi & Laurence J. Kotlikoff, 1995. "Parental Altruism and Inter Vivos Transfers: Theory and Evidence," Boston University - Institute for Economic Development 65, Boston University, Institute for Economic Development.
  24. Melvin Stephens, 2002. "Worker Displacement and the Added Worker Effect," Journal of Labor Economics, University of Chicago Press, vol. 20(3), pages 504-537, July.
  25. Daron Acemoglu & Joshua Angrist, 2001. "How Large are Human-Capital Externalities? Evidence from Compulsory-Schooling Laws," NBER Chapters, in: NBER Macroeconomics Annual 2000, Volume 15, pages 9-74 National Bureau of Economic Research, Inc.
  26. Claudia Goldin & Lawrence F. Katz, 1997. "Why the United States Led in Education: Lessons from Secondary School Expansion, 1910 to 1940," NBER Working Papers 6144, National Bureau of Economic Research, Inc.
  27. Lundberg, Shelly, 1985. "The Added Worker Effect," Journal of Labor Economics, University of Chicago Press, vol. 3(1), pages 11-37, January.
  28. David Card & Alan B. Krueger, 1991. "School Quality and Black-White Relative Earnings: A Direct Assessment," NBER Working Papers 3713, National Bureau of Economic Research, Inc.
  29. Alan Krueger, 1996. "Observations on International Labor Standards and Trade," Working Papers 741, Princeton University, Department of Economics, Industrial Relations Section..
  30. Charles F. Manski, 1993. "Identification of Endogenous Social Effects: The Reflection Problem," Review of Economic Studies, Oxford University Press, vol. 60(3), pages 531-542.
  31. Rajeev Dehejia & Adriana Lleras-Muney, 2003. "Why Does Financial Development Matter? The United States from 1900 to 1940," NBER Working Papers 9551, National Bureau of Economic Research, Inc.
  32. Jean-Marie Baland & James A. Robinson, 2000. "Is Child Labor Inefficient?," Journal of Political Economy, University of Chicago Press, vol. 108(4), pages 663-679, August.
  33. repec:fth:prinin:362 is not listed on IDEAS
  34. Lleras-Muney, Adriana, 2002. "Were Compulsory Attendance and Child Labor Laws Effective? An Analysis from 1915 to 1939," Journal of Law and Economics, University of Chicago Press, vol. 45(2), pages 401-35, October.
  35. Gary S. Becker, 1981. "A Treatise on the Family," NBER Books, National Bureau of Economic Research, Inc, number beck81-1.
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