Do Market Wages Influence Child Labour and Child Schooling?

Abstract

This paper provides empirical evidence on the joint determinants of child labor and child schooling using individual level data from Egypt. The main findings are as follows: (i) A 10% increase in the illiterate male market wage decreases the probability of child labor by 21.5% for boys and 13.1% for girls. (ii) Higher local regional income inequality increases the likelihood of child labor. (iii) Parents who were child laborers themselves are more likely to send their children out to work. (vi) Local labor market conditions - the share of adults engaged in the public sector or in non-regular jobs - play an important role in influencing child labor participation. (iv) There is a trade-off between child labor and child schooling. The results suggest that not only is poverty the main cause of child labor, but that child labor perpetuates poverty as well.

Keywords: child labour, schooling, developing countries, wages, poverty

JEL Classification: I20, I30, J13, J20, O15