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Household Choices of Child Labor and Schooling: A Simple Model with Application to Brazil

Author

Listed:
  • Diana Kruger
  • Rodrigo R. Soares
  • Matias Berthelon
Abstract
This paper develops a simple theory of household choices of child labor and schooling. The model is used as a benchmark to read the available empirical evidence and to guide our empirical specification. We argue that part of the conflicting results from the previous literature – related to the effect of improvements in economic conditions on child labor – derives from the different income and substitution effects implicit in different types of income variation. Our model suggests an empirical specification where income and substitution effects can be identified. We use agricultural shocks to local economic activity in Brazil (coffee production) to distinguish between the effects of increases in household income and increases in the opportunity cost of children’s time. The results show that higher parental wages and household wealth are associated with lower child labor and higher school attendance. Nevertheless, conditional on family income and socioeconomic status, exogenous temporary increases in local economic activity are associated with higher child labor and lower schooling. The paper reconciles economic theory with seemingly contradictory evidence from previous empirical studies.

Suggested Citation

  • Diana Kruger & Rodrigo R. Soares & Matias Berthelon, 2010. "Household Choices of Child Labor and Schooling: A Simple Model with Application to Brazil," Working Papers 09-2010, Universidade de São Paulo, Faculdade de Economia, Administração e Contabilidade de Ribeirão Preto.
    • Handle: RePEc:fea:wpaper:09-2010
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    References listed on IDEAS

    as
    1. Edmonds, Eric V., 2008. "Child Labor," Handbook of Development Economics, in: T. Paul Schultz & John A. Strauss (ed.), Handbook of Development Economics, edition 1, volume 4, chapter 57, pages 3607-3709, Elsevier.
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    3. Carol Ann Rogers & Kenneth A. Swinnerton, 2004. "Does Child Labor Decrease When Parental Incomes Rise?," Journal of Political Economy, University of Chicago Press, vol. 112(4), pages 939-968, August.
    4. Ranjan, Priya, 2001. "Credit constraints and the phenomenon of child labor," Journal of Development Economics, Elsevier, vol. 64(1), pages 81-102, February.
    5. Kruger, Diana I., 2007. "Coffee production effects on child labor and schooling in rural Brazil," Journal of Development Economics, Elsevier, vol. 82(2), pages 448-463, March.
    6. Victoria Gunnarsson & Peter F. Orazem & Mario A. Sánchez, 2006. "Child Labor and School Achievement in Latin America," The World Bank Economic Review, World Bank, vol. 20(1), pages 31-54.
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    10. Eliana Cardoso & Andre Portela Souza, 2004. "The Impact of Cash Transfers on Child Labor and School Attendance in Brazil," Vanderbilt University Department of Economics Working Papers 0407, Vanderbilt University Department of Economics.
    11. Duryea, Suzanne & Arends-Kuenning, Mary, 2003. "School Attendance, Child Labor and Local Labor Market Fluctuations in Urban Brazil," World Development, Elsevier, vol. 31(7), pages 1165-1178, July.
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    15. Emerson, Patrick M & Souza, Andre Portela, 2003. "Is There a Child Labor Trap? Intergenerational Persistence of Child Labor in Brazil," Economic Development and Cultural Change, University of Chicago Press, vol. 51(2), pages 375-398, January.
    16. Levison, Deborah & Moe, Karine S. & Marie Knaul, Felicia, 2001. "Youth Education and Work in Mexico," World Development, Elsevier, vol. 29(1), pages 167-188, January.
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    More about this item

    Keywords

    child labor; schooling; generalized ordered logit; agricultural shocks; Brazil;
    All these keywords.

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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