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How does working as a child affect wage, income, and poverty asan adult?

Author

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  • Ilahi, Nadeem
  • Orazem, Peter F.
  • Sedlacek, Guilherme

Abstract

The authors use a unique data set on adult earnings in Brazil to study how child labor affects adult earnings through its impacts on work experience, years of schooling, and human capital attained per year of schooling. Adding up these positive and negative effects, their empirical findings suggest that adults who entered the labor market before age 13 earn 20 percent less per hour, have 26 percent lower incomes, and are 14 percent more likely to be in the lowest two income quintiles. Overall, child labor raises the probability of being poor later in life by 13 percent to 31percent. These magnitudes are large. On the other hand, while child labor reduces the productivity of schooling, the net effect of an additional year of schooling on adult wages is still positive, even if the child works while in school. Consequently, policies which delay dropping out of school, even as the child works, appear to be effective at mitigating adult poverty. This report is a promising first step toward a better understanding of the theoretically ambiguous impact of early labor market entry on lifetime labor market outcomes and the dynastic poverty traps discussed below.

Suggested Citation

  • Ilahi, Nadeem & Orazem, Peter F. & Sedlacek, Guilherme, 2005. "How does working as a child affect wage, income, and poverty asan adult?," Social Protection and Labor Policy and Technical Notes 32745, The World Bank.
  • Handle: RePEc:wbk:hdnspu:32745
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    References listed on IDEAS

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    1. Edmonds, Eric V., 2008. "Child Labor," Handbook of Development Economics, Elsevier.
    2. Lam, David & Schoeni, Robert F, 1993. "Effects of Family Background on Earnings and Returns to Schooling: Evidence from Brazil," Journal of Political Economy, University of Chicago Press, vol. 101(4), pages 710-740, August.
    3. Levy, Victor, 1985. "Cropping Pattern, Mechanization, Child Labor, and Fertility Behavior in a Farming Economy: Rural Egypt," Economic Development and Cultural Change, University of Chicago Press, vol. 33(4), pages 777-791, July.
    4. Kaushik Basu, 1999. "Child Labor: Cause, Consequence, and Cure, with Remarks on International Labor Standards," Journal of Economic Literature, American Economic Association, vol. 37(3), pages 1083-1119, September.
    5. Hanan G. Jacoby & Emmanuel Skoufias, 1997. "Risk, Financial Markets, and Human Capital in a Developing Country," Review of Economic Studies, Oxford University Press, vol. 64(3), pages 311-335.
    6. Elizabeth M. King & Peter F. Orazem & Elizabeth M. Paterno, 2016. "Promotion with and without Learning: Effects on Student Enrollment and Dropout Behavior," World Bank Economic Review, World Bank Group, vol. 30(3), pages 580-602.
    7. Peter Jensen & Helena Skyt Nielsen, 1997. "Child labour or school attendance? Evidence from Zambia," Journal of Population Economics, Springer;European Society for Population Economics, vol. 10(4), pages 407-424.
    8. Emerson, Patrick M. & Portela Souza, Andre, 2005. "The inter-generational persistence of child labor," Social Protection and Labor Policy and Technical Notes 32746, The World Bank.
    9. 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.
    10. George Psacharopoulos & Harry Anthony Patrinos, 1997. "Family size, schooling and child labor in Peru - An empirical analysis," Journal of Population Economics, Springer;European Society for Population Economics, vol. 10(4), pages 387-405.
    11. Parsons, Donald O & Goldin, Claudia, 1989. "Parental Altruism and Self-Interest: Child Labor among Late Nineteenth-Century American Families," Economic Inquiry, Western Economic Association International, vol. 27(4), pages 637-659, October.
    12. Ravallion, Martin & Wodon, Quentin, 2000. "Does Child Labour Displace Schooling? Evidence on Behavioural Responses to an Enrollment Subsidy," Economic Journal, Royal Economic Society, vol. 110(462), pages 158-175, March.
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    Cited by:

    1. Isaac Koomson & Simplice A. Asongu, 2016. "Relative Contribution of Child Labour to Household Farm and Non-Farm Income in Ghana: Simulation with Child's Education," African Development Review, African Development Bank, vol. 28(1), pages 104-115, March.

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