Intrinsic Motivation, Discrimination and the Child Labor-Schooling Trade-Off: Some Empirical Findings

Abstract

By explicitly taking the interdependence of the decisions over children's labor and school attendance into account, we jointly estimate a two-equation system applying a bivariate probit model to data from Uganda. We argue that the correlation coefficient of the equations' error terms can be interpreted as the decision trade-off between child labor and schooling, and through a novel methodological approach we obtain evidence for substantial differences across a number of comparison groups; in particular, we detect a gender, age and relationship bias. We add proxies to control for parental preferences based on self-reported answers from the survey data and find that intrinsic motivation can neither explain the gender nor the age bias implying that parents do not discriminate against their daughters or older children other than for mere economic reasons. The age bias seems mainly driven by cost-related factors and parents' cost-sensitivity. We do, however, find conclusive evidence for discrimination against children who are not related to the household head, since the observed relationship bias is to some extent driven by parents' intrinsic motivation.

Keywords: child labor, educational investment, trade-off, intrinsic motivation, discrimination, bivariate probit, Uganda

JEL Classification: C35, J82, O15