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Why does child labour persist with declining poverty?

  • Jayanta Sarkar



  • Dipanwita Sarkar



Uneven success of poverty-based approaches calls for a re-think of the causes behind persistent child labour in many developing societies. We develop a theoretical model to highlight the role of income inequality as a channel of persistence. The interplay between income inequality and investments in human capital gives rise to a non-convergent dynamic path of income distribution characterised by clustering of steady state relative incomes around local poles. The child labour trap thus generated is shown to preserve itself despite rising per capita income. In this context, we demonstrate that redistributive policies, such as public provision of education can alleviate the trap, while a ceteris paribus ban on child labour is likely to aggravate it.

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Paper provided by National Centre for Econometric Research in its series NCER Working Paper Series with number 84.

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Length: 46 pages
Date of creation: 07 Jun 2012
Date of revision: 21 Nov 2012
Handle: RePEc:qut:auncer:2012_7
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