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Household vulnerability and child labor : the effect of shocks, credit rationing and insurance

  • Guarcelllo, Lorenzo
  • Mealli, Fabrizia
  • Rosati, Furio Camillo

The theoretical literature has pointed at the importance of access to credit market in determining the household decisions concerning children's activities and the reaction of households to adverse shocks. In this paper we address these issues making use of a unique data set for Guatemala that contains information on credit rationing and shocks. We address the potential endogeneity of the variable of interest using a methodology based on propensity scores and we use sensitivity analysis to assess the robustness of the estimates with respect to unobservables. The results show the importance of access to credit markets and of shocks in determining children's labor supply.

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Paper provided by The World Bank in its series Social Protection and Labor Policy and Technical Notes with number 29136.

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Date of creation: 01 Nov 2003
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Handle: RePEc:wbk:hdnspu:29136
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  1. Manski, Charles F, 1990. "Nonparametric Bounds on Treatment Effects," American Economic Review, American Economic Association, vol. 80(2), pages 319-23, May.
  2. Bjorklund, Anders & Moffitt, Robert, 1987. "The Estimation of Wage Gains and Welfare Gains in Self-selection," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 42-49, February.
  3. Eric V. Edmonds, 2007. "Child Labor," NBER Working Papers 12926, National Bureau of Economic Research, Inc.
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  5. Cigno, Alessandro & Rosati, Furio Camillo, 2005. "The Economics of Child Labour," OUP Catalogue, Oxford University Press, number 9780199264452, December.
  6. Angrist, Joshua D. & Krueger, Alan B., 1999. "Empirical strategies in labor economics," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 23, pages 1277-1366 Elsevier.
  7. Jalan, Jyotsna & Ravallion, Martin, 2003. "Estimating the Benefit Incidence of an Antipoverty Program by Propensity-Score Matching," Journal of Business & Economic Statistics, American Statistical Association, vol. 21(1), pages 19-30, January.
  8. 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.
  9. Heckman, James J. & Lalonde, Robert J. & Smith, Jeffrey A., 1999. "The economics and econometrics of active labor market programs," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 31, pages 1865-2097 Elsevier.
  10. Cigno, Alessandro & Rosati, Furio C. & Tzannatos, Zafiris, 2002. "Child labor handbook," Social Protection and Labor Policy and Technical Notes 25507, The World Bank.
  11. Dehejia, Rajeev H. & Beegle, Kathleen & Gatti, Roberta, 2003. "Child labor, income shocks, and access to credit," Policy Research Working Paper Series 3075, The World Bank.
  12. Beegle, Kathleen & Dehejia, Rajeev H. & Gatti, Roberta, 2006. "Child labor and agricultural shocks," Journal of Development Economics, Elsevier, vol. 81(1), pages 80-96, October.
  13. Björklund, Anders, 1983. "Estimation of Wage Gains and Welfare Gains from Self-Selection Models," Working Paper Series 105, Research Institute of Industrial Economics.
  14. Mealli, Fabrizia & Rubin, Donald B., 2003. "Assumptions allowing the estimation of direct causal effects," Journal of Econometrics, Elsevier, vol. 112(1), pages 79-87, January.
  15. Sascha O. Becker & Andrea Ichino, 2002. "Estimation of average treatment effects based on propensity scores," Stata Journal, StataCorp LP, vol. 2(4), pages 358-377, November.
  16. Pratt, John W. & Schlaifer, Robert, 1988. "On the interpretation and observation of laws," Journal of Econometrics, Elsevier, vol. 39(1-2), pages 23-52.
  17. Rajeev Dehejia & Roberta Gatti, 2002. "Child Labor: The Role of Income Variability and Access to Credit Across Countries," NBER Working Papers 9018, National Bureau of Economic Research, Inc.
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