Child labor

Abstract

The common perception of child labor is that children work because their family is very poor. This approach clashes with evidence that children work even when family income is well above subsistence level, but it has been shown that the effect decreases as income increases. In countries with per‐capita GDP below 1,000 dollars a year, a 1 percent increase in per‐capita GDP is associated with a 10 percent reduction in child labor. For countries with per‐capita GDP between 1,000 and 4,000 dollars, the effects are less than 5 percent. For those with per‐capita GDP above 4,000 dollars, the reduction is less than 4 percent. For higher income countries, the reduction in child labor is about 2 percent. Therefore, the association between child labor and per‐capita GDP loses importance as the latter becomes larger. If we want to explain child labor in countries other than those with less than 1,000 dollars of GDP per capita, we must then look for different mechanisms.