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Is Child Work Necessary?

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  • Sonia Bhalotra

    (University of Cambridge)

Abstract
This paper investigates whether the income from child wage work is necessary to the survival of rural households in Pakistan. It is by no means obvious that it is. For instance, children may work because the returns to work exceed the returns to school, or because parents are selfish or short-sighted. It is argued here that, if child work is necessary, then the income effect of a wage change will dominate the substitution effect and the labour supply curve will be "forward falling" or negatively sloped at low wages. Existing studies have concentrated on the income elasticity, but this tells us nothing other than that leisure is a normal good. Studying the wage elasticity, however, permits us to infer from behavioural responses whether or not a household is at a subsistence level of income. Structural labour supply models for boys and girls are estimated, conditioning on full income and a range of demographic variables. We cannot reject the hypothesis that child work is necessary in the first quartile of the expenditure distribution. This suggests that trade sanctions or bans on child labour may be undesirable in the short run unless households are compensated for the loss in income. On the other hand, policies targeted at alleviating poverty or liquidity constraints are likely to reduce the prevalence of child work.

Suggested Citation

  • Sonia Bhalotra, 2000. "Is Child Work Necessary?," Econometric Society World Congress 2000 Contributed Papers 0500, Econometric Society.
    • Handle: RePEc:ecm:wc2000:0500
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    More about this item

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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