Child labor and household wealth: Theory and empirical evidence of an inverted-U

Abstract

Some studies on child labor have shown that, at the level of the household, greater land wealth leads to higher child labor, thereby casting doubt on the hypothesis that child labor is caused by poverty. This paper argues that the missing ingredient may be an explicit modeling of the labor market. We develop a simple model which suggests the possibility of an inverted-U relationship between land holdings and child labor. Using a unique data set that has child labor hours it is found that, controlling for child, household and village characteristics, the turning point beyond which more land leads to a decline in child labor occurs around 4 acres of land per household.

Mothers’ Employment and their Children’s Schooling: A Joint Multilevel Analysis for India

“…In rural areas the effect is peculiar: a few acres of land property decreases the probability of schooling, since children are expected to engage in the family agricultural activities, but as the number of acres of land owned rises, the effect tends to become a pure wealth effect, thus increasing the probability of studying (the fitted parabola has a minimum at 23 acres). This result is consistent with the theoretical and empirical evidence of an inverted-U relationship between land holdings and child labor discussed in Basu et al (2010). Turning to the professional position of the mother's partner, we find that partners in higher positions increase the probability of children attending school, since skilled workers, salesmen and, especially, clerical/professional workers have a significant and positive effect as compared to the unskilled workers or the unemployed.…”

Market Imperfections and Child Labor

“…The adult is assumed to provide 5 This utility is the one chosen by Basu et al (2010). Results similar to those of Basu have been obtained with utility function that do not make such assumptions; it is therefore 6 one unit of labor.…”

“…This has proven wrong in dierent studies (Bhalotra and Heady, 2003;Mueller, 1984;Dumas, 2007;Basu et al, 2010). This is not very surprising: when income is low, we expect consumption to be much more valued than child leisure.…”

“…A discussion on the eect of the imperfections bearing on the other markets is postponed after the model. Bhalotra and Heady (2003);Dumas (2007) or Basu et al (2010) have only considered the 2 polar cases with perfect and competitive labor markets or with absence of labor markets. We start by lling this gap with an analysis of the eect of a continuous change in labor market imperfections.…”

“…Some papers have shown that time children devote to work may increase with land owned by the household (Mueller, 1984;Bhalotra and Heady, 2003;Dumas, 2007;Basu et al, 2010) or with the production goods prices (Kruger, 2004;Duryea and Arends-Kuenning, 2003;Cogneau and Jedwab, 2008), which should not take place if land and labor markets were competitive, because of the separability property (Singh et al, 1986). This is therefore some indirect evidence that markets are non competitive in developing countries and that this aects children's time allocation.…”