Child Labor and Schooling Responses to Access to Microcredit in Rural Bangladesh

Economic Inquiry, Forthcoming

29 Pages Posted: 17 Jan 2012  

Asad Islam

Monash University - Department of Economics

Chongwoo Choe

Monash University - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: November 16, 2010

Abstract

Microcredit has been shown to be effective in reducing poverty in many developing countries. However, less is known about its effect on human capital formation. In this article, we examine the impact of access to microcredit on children’s education and child labor using a new and large data set from rural Bangladesh. The results show that household participation in a microcredit program may increase child labor and reduce school enrollment. The adverse effects are more pronounced for girls than boys. Younger children are more adversely affected than their older siblings and the children of poorer and less educated households are affected most adversely. Our findings remain robust to different specifications and methods, and when corrected for various sources of selection bias.

Suggested Citation

Islam, Asad and Choe, Chongwoo, Child Labor and Schooling Responses to Access to Microcredit in Rural Bangladesh (November 16, 2010). Economic Inquiry, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1986388

Asadul Islam

Monash University - Department of Economics ( email )

Department of Economics
Monash University
Caulfield East, Victoria
Australia
+61399032783 (Phone)

HOME PAGE: http://users.monash.edu/~asaduli/

Chongwoo Choe (Contact Author)

Monash University - Department of Economics ( email )

Department of Economics
PO Box 197
Caulfield East, Victoria 3145
Australia
+61 2 9903 1125 (Phone)
+61 2 9903 1128 (Fax)

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