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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. Goldin, Claudia, 1999. "Egalitarianism and the Returns to Education during the Great Transformation of American Education," Scholarly Articles 2623652, Harvard University Department of Economics.
  2. Goldin, Claudia & Sokoloff, Kenneth, 1982. "Women, Children, and Industrialization in the Early Republic: Evidence from the Manufacturing Censuses," The Journal of Economic History, Cambridge University Press, vol. 42(04), pages 741-774, December.
  3. 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.
  4. 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.
  5. 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.
  6. Chiappori, P.A., 1989. "Collective Labour Supply and Welfare," DELTA Working Papers 89-07, DELTA (Ecole normale supérieure).
  7. Ashenfelter, Orley & Heckman, James J, 1974. "The Estimation of Income and Substitution Effects in a Model of Family Labor Supply," Econometrica, Econometric Society, vol. 42(1), pages 73-85, January.
  8. Manski, C.F., 1991. "Identification of Endogenous Social Effects: the Reflection Problem," Working papers 9127, Wisconsin Madison - Social Systems.
  9. Duncan Thomas, 1990. "Intra-Household Resource Allocation: An Inferential Approach," Journal of Human Resources, University of Wisconsin Press, vol. 25(4), pages 635-664.
  10. Lundberg, Shelly, 1985. "The Added Worker Effect," Journal of Labor Economics, University of Chicago Press, vol. 3(1), pages 11-37, January.
  11. Orley Ashenfelter, 1977. "Unemployment as Disequilibrium in a Model of Aggregate Labor Supply," Working Papers 484, Princeton University, Department of Economics, Industrial Relations Section..
  12. Joseph G. Altonji & Fumio Hayashi & Laurence Kotlikoff, 1995. "Parental Altruism and Inter Vivos Transfers: Theory and Evidence," NBER Working Papers 5378, National Bureau of Economic Research, Inc.
  13. Alan B. Krueger, 1996. "Observations on International Labor Standards and Trade," NBER Working Papers 5632, National Bureau of Economic Research, Inc.
  14. Claudia Goldin & Lawrence F. Katz, 1998. "The Origins Of Technology-Skill Complementarity," The Quarterly Journal of Economics, MIT Press, vol. 113(3), pages 693-732, August.
  15. 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.
  16. Michael Boozer & Alan Krueger & Shari Wolkon, 1992. "Race and School Quality Since Brown vs. Board of Education," Working Papers 681, Princeton University, Department of Economics, Industrial Relations Section..
  17. repec:cup:cbooks:9780521296762 is not listed on IDEAS
  18. Basu, Kaushik & Van, Pham Hoang, 1998. "The Economics of Child Labor," American Economic Review, American Economic Association, vol. 88(3), pages 412-27, June.
  19. 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.
  20. Joshua Angrist & Alan Krueger, 1990. "Does Compulsory School Attendance Affect Schooling and Earnings?," Working Papers 653, Princeton University, Department of Economics, Industrial Relations Section..
  21. 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.
  22. Thomas, D., 1995. "Like Father, Like Son, Like Mother, Like Daughter, Parental Resources and Child Height," Papers 95-01, RAND - Reprint Series.
  23. Goldin, Claudia & Katz, Lawrence, 2000. "Education and Income in the Early 20th Century: Evidence from the Prairies," Scholarly Articles 2624456, Harvard University Department of Economics.
  24. Matthias Doepke & Fabrizio Zilibotti, 2005. "The Macroeconomics of Child Labor Regulation," American Economic Review, American Economic Association, vol. 95(5), pages 1492-1524, December.
  25. 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.
  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. 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.
  28. Gary S. Becker, 1981. "A Treatise on the Family," NBER Books, National Bureau of Economic Research, Inc, number beck81-1, December.
  29. 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.
  30. 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.
  31. 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.
  32. 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.
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