IDEAS home Printed from https://ideas.repec.org/p/unp/wpaper/201002.html
   My bibliography  Save this paper

The Effect of Income Shocks and Credit Constraint on Child Labor Participation and Poverty: The Case of Indonesia

Author

Listed:
  • Pipit Pitriyan

    (Department of Economics, Padjadjaran University)

  • Ahmad Komarulzaman

    (Department of Economics, Padjadjaran University)

Abstract

Lies near the Eurasia and Indo-Australia’s border plate, Indonesia is categorized as natural disaster prone areas. It is common for Indonesian to experience earthquakes that occurs due to volcanic activities or ground movement. The most frequent natural disasters hit these districts are: landslide, earthquake, and flood. The other type of natural disaster is drought, which is more common to the rest of areas and more predictable compare to the previous disasters. For those who are living in disaster prone areas, disasters do not only destroy their assets, but also damages their source of income. Moreover, it can affect the decision of household related to the activity of their child. This study aims to analyze the effect of income shocks and credit constraints on poverty and child working activity in Indonesia. We will employ logit regression to estimate the effect of income shocks and credit constraints on income. Furthermore, multinomial logit estimate will be used to capture the effect of income shocks and credit constraints on household’s poverty status and household’s child activity. It is hipotized that the disaster-related-income-shock and constraints to acquire credit have significant effect on poverty as well as child working activity.

Suggested Citation

  • Pipit Pitriyan & Ahmad Komarulzaman, 2010. "The Effect of Income Shocks and Credit Constraint on Child Labor Participation and Poverty: The Case of Indonesia," Working Papers in Economics and Development Studies (WoPEDS) 201002, Department of Economics, Padjadjaran University, revised Jun 2010.
    • Handle: RePEc:unp:wpaper:201002
    as

    Download full text from publisher

    File URL: http://ceds.feb.unpad.ac.id/wopeds/201002.pdf
    File Function: First version, 2010
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Hanan G. Jacoby & Emmanuel Skoufias, 1997. "Risk, Financial Markets, and Human Capital in a Developing Country," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 64(3), pages 311-335.
    2. Skoufias, Emmanual & Parker, Susan W., 2002. "Labor market shocks and their impacts on work and schooling," FCND briefs 129, International Food Policy Research Institute (IFPRI).
    3. Gloria M. Rubio & Isidro Soloaga, 2004. "Assessing the Vulnerability of Agricultural Households to Macroeconomic Shocks: Evidence from Mexico," The Electronic Journal of Agricultural and Development Economics, Food and Agriculture Organization of the United Nations, vol. 1(1), pages 45-62.
    4. Raddatz, Claudio, 2007. "Are external shocks responsible for the instability of output in low-income countries?," Journal of Development Economics, Elsevier, vol. 84(1), pages 155-187, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Marcelo Côrtes Neri & Emily Gustafsson-Wright & Guilherme Sedlacek & Peter F. Orazem, 2009. "The Responses of Child Labor, School Enrollment, and Grade Repetition to the Loss of Parental Earnings in Brazil, 1982–1999," Palgrave Macmillan Books, in: Peter F. Orazem & Guilherme Sedlacek & Zafiris Tzannatos (ed.), Child Labor and Education in Latin America, chapter 3, pages 55-68, Palgrave Macmillan.
    2. Drusilla K. Brown & Alan V. Deardorff & Robert M. Stern, 2009. "The Effects of Multinational Production on Wages and Working Conditions in Developing Countries," World Scientific Book Chapters, in: Globalization And International Trade Policies, chapter 17, pages 623-687, World Scientific Publishing Co. Pte. Ltd..
    3. Emiliano Magrini & Pierluigi Montalbano, 2012. "Trade openness and vulnerability to poverty: Vietnam in the long-run (1992-2008)," Working Paper Series 3512, Department of Economics, University of Sussex Business School.
    4. Emla Fitzsimons & Alice Mesnard, 2008. "Are boys and girls affected differently when the household head leaves for good? Evidence from school and work choices in Colombia," IFS Working Papers W08/11, Institute for Fiscal Studies.
    5. Ucw, 2010. "Child labour: trends, challenges and policy responses. Joining forces against child labour," UCW Working Paper 49, Understanding Children's Work (UCW Programme).
    6. Ersado, Lire, 2005. "Child Labor and Schooling Decisions in Urban and Rural Areas: Comparative Evidence from Nepal, Peru, and Zimbabwe," World Development, Elsevier, vol. 33(3), pages 455-480, March.
    7. Ersado, Lire, 2002. "Child labor and school decisions in urban and rural areas," FCND briefs 145, International Food Policy Research Institute (IFPRI).
    8. Ersado, Lire, 2003. "Child Labor And Schooling Decisions In Urban And Rural Areas: Cross-Country Evidence," 2003 Annual meeting, July 27-30, Montreal, Canada 21924, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    9. Thomas K.J. McDermott & Frank Barry & Richard S.J. Tol, 2014. "Disasters and development: natural disasters, credit constraints, and economic growth," Oxford Economic Papers, Oxford University Press, vol. 66(3), pages 750-773.
    10. Emla Fitzsimons & Alice Mesnard, 2012. "How children's schooling and work are affected when their father leaves permanently: evidence from Colombia," IFS Working Papers W12/04, Institute for Fiscal Studies.
    11. Thomas K.J. McDermott, "undated". "Disasters and Development: Natural Disasters, Credit Constraints and Economic Growth," The Institute for International Integration Studies Discussion Paper Series iiisdp363, IIIS.
    12. Mesnard, Alice & Fitzsimons, Emla, 2008. "Are Boys and Girls Affected Differently When the Household Head Leaves for Good? Evidence from School and Work Choices in Colom," CEPR Discussion Papers 7040, C.E.P.R. Discussion Papers.
    13. Hiroaki Ishiwata & Muneta Yokomatsu, 2018. "Dynamic Stochastic Macroeconomic Model of Disaster Risk Reduction Investment in Developing Countries," Risk Analysis, John Wiley & Sons, vol. 38(11), pages 2424-2440, November.
    14. Jennifer Helgeson & Simon Dietz & Stefan Hochrainer-Stigler, 2012. "Vulnerability to weather disasters: the choice of coping strategies in rural Uganda," GRI Working Papers 91, Grantham Research Institute on Climate Change and the Environment.
    15. de Janvry, Alain & Finan, Frederico & Sadoulet, Elisabeth & Vakis, Renos, 2006. "Can conditional cash transfer programs serve as safety nets in keeping children at school and from working when exposed to shocks?," Journal of Development Economics, Elsevier, vol. 79(2), pages 349-373, April.
    16. Gianni Toniolo & Giovanni Vecchi, 2007. "Italian Children at Work, 1881-1961," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 66(3), pages 401-427, November.
    17. Chul‐Woo Kwon & Peter F. Orazem & Daniel M. Otto, 2006. "Off‐farm labor supply responses to permanent and transitory farm income," Agricultural Economics, International Association of Agricultural Economists, vol. 34(1), pages 59-67, January.
    18. Kathleen Beegle & Rajeev Dehejia & Roberta Gatti, 2003. "Child Labor, Crop Shocks, and Credit Constraints," NBER Working Papers 10088, National Bureau of Economic Research, Inc.
    19. Motkuri, Venkatanarayana, 2006. "Child Labour and Educational Deprivation of Children : A Review of Literature," MPRA Paper 48437, University Library of Munich, Germany.
    20. Joël Cariolle & Michaël Goujon, 2015. "Measuring Macroeconomic Instability: A Critical Survey Illustrated With Exports Series," Journal of Economic Surveys, Wiley Blackwell, vol. 29(1), pages 1-26, February.

    More about this item

    Keywords

    shock; credit constraint; child labor; poverty; disaster;
    All these keywords.

    JEL classification:

    • D19 - Microeconomics - - Household Behavior - - - Other
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:unp:wpaper:201002. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Arief Anshory Yusuf (email available below). General contact details of provider: https://edirc.repec.org/data/lppadid.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.