Economic Well-Being and Child Labor: The Inter Action of Family and Industry

46 Pages Posted: 29 Dec 2000 Last revised: 11 May 2014

See all articles by Claudia Goldin

Claudia Goldin

Harvard University - Department of Economics; National Bureau of Economic Research (NBER)

Donald O. Parsons

George Washington University; IZA Institute of Labor Economics

Date Written: July 1981

Abstract

How did industrialization in the nineteenth century affect the well-being of children among American working class families? Two revealing surveys from 1890 and 1907 are used to examine the implications of child labor on schooling decisions and on possible offsetting intrafamily transfers, in the form of current "retained" earnings or future asset transfers. Both issues are analyzed within the context of a formal model of family labor supply, in which returns to schooling accrue after the youth has left the household and thus the interests of the parents and the child need not coincide. Parents working in the industries examined did not, it appears, compensate their children for the reduced future earnings implied by child labor, in either the current or in future time periods. But, in addition, the migration of families in which parental altruism was weak may have eliminated much of the apparent increase in family income due to higher child earnings. We end with a note reconciling our findings with the long term trend away from child labor.

Suggested Citation

Goldin, Claudia and Parsons, Donald O., Economic Well-Being and Child Labor: The Inter Action of Family and Industry (July 1981). NBER Working Paper No. w0707. Available at SSRN: https://ssrn.com/abstract=245831

Claudia Goldin (Contact Author)

Harvard University - Department of Economics ( email )

Littauer Center
Cambridge, MA 02138
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617-495-3934 (Phone)

National Bureau of Economic Research (NBER) ( email )

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Donald O. Parsons

George Washington University ( email )

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United States

IZA Institute of Labor Economics

Schaumburg-Lippe-Str. 7 / 9
Bonn, D-53072
Germany

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