Growth and Inverted U in Child Labour: A Dual Economy Approach
While it is commonly accepted that the main cause of child labour is poverty, empirical observations suggest that economic growth is not always associated with the reduction in child labour. We show, in a dual economy framework, that the e¤ect of productivity growth upon child labour may be positive or negative. In particular, changes in the productivity gap between the modern and the traditional sectors, due to the technological progress, can generate an increase in child labour. In a dynamic version of the model we also investigate how this e¤ect depends on the quality of schooling.
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