Introducing uncertainty into Baland and Robinson's model of child labour

Pouliot, William

doi:10.1016/j.jdeveco.2004.12.001

Cited by 22 publications

(16 citation statements)

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“…We extend the basic model to integrate uncertainty in the returns to education, along the lines proposed by Pouliot (2006). If returns to education are risky, a child's consumption level, c c , is given by…”

Section: Child Labor and Uncertaintymentioning

confidence: 99%

“…As in Pouliot (2006), uncertainty in the returns to education increases the level of child labor in all cases. When parental transfers are positive, combining (35), (38), and (40), we obtain:…”

Section: Child Labor and Uncertaintymentioning

confidence: 99%

“…Closer to this paper, Pouliot (2006) introduces uncertainty in returns to human capital into Baland and Robinson (2000). He shows that, if the return to education is a continuous random variable, the level of child labor is inefficiently high in the absence of insurance markets, even when bequests and savings are interior.…”

Section: Introductionmentioning

confidence: 99%

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Mortality risks, education and child labor

Estevan

Baland

2007

Journal of Development Economics

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In this paper, we investigate the role of young adult mortality on child labor and educational decisions. We argue that mortality risks are a major source of risks in returns to education in developing countries. We show that, in the absence of appropriate insurance mechanisms, the level of child labor is inefficient, but it can be too high or too low. It is too high when parents are not very altruistic and anticipate positive transfers from their children in the future. Uncertain returns to education, endogenous mortality or imperfect capital markets unambiguously increase child labor. When the level of child labor is inefficiently high, we also show that a cash transfer conditional on child's schooling can always restore efficiency regarding child labor.

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Section: Child Labor and Uncertaintymentioning

confidence: 99%

Section: Child Labor and Uncertaintymentioning

confidence: 99%

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Mortality risks, education and child labor

Estevan

Baland

2007

Journal of Development Economics

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“…Exceptions are represented by Kodde (1986), Levhari and Weiss (1974) and Pouliot (2006). These studies show that adding uncertainty to human capital returns causes human capital investments to be inefficiently low, even in presence of perfect capital markets.…”

Section: Introductionmentioning

confidence: 94%

“…Following Baland and Robinson (2000) and Pouliot (2006), consider a representative household that maximizes a utility function over two periods, by choosing optimal savings (s) and school time (h s ) of their children. Parental income is exogenously equal to Y in period one, and stochastic in period two and equal to Ã such that: where c 1 and c 2 are household consumption levels at time 1 and 2, r the interest rate and β the subjective discount factor.…”

Section: Theoretical Frameworkmentioning

confidence: 99%

Liquidity constraints, uncertain parental income and human capital accumulation

Devicienti

Rossi

2013

Applied Economics Letters

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Child labor

Cigno¹

2016

The Wiley‐Blackwell Encyclopedia of Globalization

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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.

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Introducing uncertainty into Baland and Robinson's model of child labour

Cited by 22 publications

References 1 publication

Mortality risks, education and child labor

Mortality risks, education and child labor

Liquidity constraints, uncertain parental income and human capital accumulation

Child labor

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