Does Child Labor Decline with Improving Economic Status?

Abstract

From 1993 to 1997, GDP per capita in Vietnam grew by between 6 and 7 percent annually. Child labor declined by 28 percent over this period. Using a simple, nonparametric decomposition, I investigate the relationship between improvements in per capita expenditure and child labor with a panel dataset of Vietnamese households that spans this episode of growth. I find that improvements in per capita expenditure can explain 80 percent of the decline in child labor that occurs in households whose expenditures improve enough to move out of poverty. This finding suggests a previously undocumented role for economic growth in the amelioration of child labor.