Child Labor and School Achievement in Latin America

Abstract

Child labor's effect on academic achievement is estimated, using unique data on 3 rd and 4 th graders in 11 Latin American countries. Cross-country variation in truancy regulations provides an exogenous shift in the ages of children normally in these grades, providing exogenous variation in opportunity cost of child time. Least-squares estimates of the impact of child labor on test scores are biased downward, but corrected estimates are still negative and statistically significant. Child labor lowers math scores by 7.5 percent and language scores by 7 percent, consistent with estimates of the adverse impact of child labor on returns to schooling. 1 World Bank 2 Department of Economics, Iowa State University 3 InterAmerican Development Bank Wallace E. Huffman, and Robert E. Mazur of Iowa State University provided numerous comments and suggestions. The findings, interpretations and conclusions are the authors' own and should not be attributed to the World Bank or the InterAmerican Development Bank, their Boards of Directors or any of their member countries. 2 Child Labor and School Achievement in Latin America 1 IntroductionAbout one of every eight children in the world is engaged in market work. Despite general acceptance that child labor is harmful and despite international accords aimed at its eradication, progress on lowering the incidence of child labor has been slow. While often associated with poverty, child labor has persisted in some countries that have experienced substantial improvements in living standards. For example, Latin America, with several countries in the middle or middle upper income categories, still has child labor participation rates that are similar to the world average.Countries have adopted various policies to combat child labor. Most have opted for legal prohibitions, but these are only as effective as the enforcement. As many child labor relationships are in informal settings within family enterprises, enforcement is often difficult.Several countries, particularly in Latin America, have initiated programs that offer households an income transfer in exchange for the household keeping their children in school and/or out of the labor market.Presumably, governments invest resources to lower child time in the labor market in anticipation that the child will devote more time to acquisition of human capital. The government's return will come from higher average earnings and reduced outlays for poverty alleviation when the child matures. However, there is very little evidence that relates child labor to schooling outcomes in developing countries. Most children who work are also in school, suggesting that perhaps child labor does not lower schooling attainment. Additionally, studies that examine the impact of child labor on test scores have often found negligible effects, although most of these are in developed country contexts. More recently, Heady (2003), and 3 Rosati and Rossi (2001) have found some evidence that child labor lowers primary school test scores in developing countries...

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