Child Labor and the Education of a Society

49 Pages Posted: 21 Aug 2001

See all articles by Clive Bell

Clive Bell

University of Heidelberg - South Asia Institute (SAI)

Hans Gersbach

ETH Zurich - CER-ETH -Center of Economic Reseaarch; IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR)

Date Written: August 2001

Abstract

We examine economic growth, inequality and education when the wellspring of growth is the formation of human capital through a combination of the quality of child-rearing and formal schooling. The existence of multiple steady states is established, including a poverty trap, wherein children work full-time and no human capital accumulation takes place, with continuous growth at an asymptotically steady rate as an alternative. We show that a society can escape from the poverty trap into a condition of continuous growth through a program of taxes and transfers. Temporary inequality is a necessary condition to escape in finite time, but long-run inequalities are avoidable provided sufficiently heavy, but temporary taxes can be imposed on the better-off. Programs aiming simply at high attendance rates in the present can be strongly non-optimal.

Keywords: Child Labor, Growth and Inequality, Education, Human Capital, Redistributive Policies, Poverty Traps

JEL Classification: H2, I2, O1, O41

Suggested Citation

Bell, Clive and Gersbach, Hans, Child Labor and the Education of a Society (August 2001). IZA Discussion Paper No. 338. Available at SSRN: https://ssrn.com/abstract=280803

Clive Bell

University of Heidelberg - South Asia Institute (SAI) ( email )

Grabengasse 14
Heidelberg, D-69117
Germany

Hans Gersbach (Contact Author)

ETH Zurich - CER-ETH -Center of Economic Reseaarch ( email )

Zürichbergstrasse 18
Zurich, 8092
Switzerland
+41 44 632 82 80 (Phone)
+41 44 632 18 30 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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