Poverty Alleviation and Child Labor

45 Pages Posted: 15 Sep 2009 Last revised: 7 Jun 2023

See all articles by Eric V. Edmonds

Eric V. Edmonds

Dartmouth College - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Norbert Schady

World Bank - Development Research Group

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Date Written: September 2009

Abstract

How important are subsistence concerns in a family's decision to send a child to work? We consider this question in Ecuador, where poor families are selected at random to receive a cash transfer that is equivalent to 7 percent of monthly expenditures. Winning the cash transfer lottery is associated with a decline in work for pay away from the child's home. The cash transfer is greater than the rise in schooling costs that comes with the end of primary school, but it is less than 20 percent of the income paid to child laborers in the labor market. Despite being less than foregone earnings, poor families seem to use the lottery award to delay the child's entry into paid employment and protect the child's schooling status. Schooling expenditures rise with the lottery, but total expenditures in the household decline relative to the control population because of foregone child labor earnings.

Suggested Citation

Edmonds, Eric V. and Schady, Norbert, Poverty Alleviation and Child Labor (September 2009). NBER Working Paper No. w15345, Available at SSRN: https://ssrn.com/abstract=1472283

Eric V. Edmonds (Contact Author)

Dartmouth College - Department of Economics ( email )

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National Bureau of Economic Research (NBER)

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Norbert Schady

World Bank - Development Research Group ( email )

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Washington, DC 20433
United States

HOME PAGE: http://econ.worldbank.org/staff/nschady

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