Regional Returns to Education, Child Labor, and Schooling in India
35 Pages Posted: 14 Sep 2004
Date Written: January 9, 2006
In an environment where children's time has an economic value and employment opportunities for educated workers are scarce, parental investments in their children's education may not be driven entirely by poverty and credit constraints. We offer evidence from India that higher returns to primary education increase schooling and decrease idleness but have a negligible effect on child labour. Our results suggest that households that are most dependent on their children's income are too poor to respond to the economic benefits of education. Implementing policies that raise the economic benefits of education - such as creating more high-skilled jobs and improving the quality of education - may increase human capital investments in households that do not rely on their children's incomes for survival. However, child labour will persist unless the poorest households are provided with the opportunity to respond to these benefits.
Keywords: Child Labor, Education, Returns to Education, Skill Premium, India
JEL Classification: I20, J24
Suggested Citation: Suggested Citation