Child labor and schooling decisions among self-help group members in rural India

Jean Marie Baland, Timothée Demont, Rohini Somanathan

Research output: Contribution to journalArticlepeer-review


This paper investigates the impact of informal microfinance groups (self-help groups, or SHGs) on children’s education and work in rural India. In 2002, 24 eligible villages were randomly selected for opening SHGs, and 12 others were randomly selected as a control group. Households were surveyed three times over a 5-year period, allowing for the study of medium-term outcomes. We find a robust and strong increase in secondary school enrollment rates over time, with intention-to-treat estimates of about 40%. This effect stems from a quicker grade progression, leading to lower dropout rates between primary and secondary school. Contrary to usual presumptions, we find no decrease in overall child labor (but a reorientation toward part-time domestic work) and no direct role of credit. By contrast, we show that social interactions within SHGs are very important.

Original languageEnglish
Pages (from-to)73-105
Number of pages33
JournalEconomic Development and Cultural Change
Issue number1
Publication statusPublished - 1 Oct 2020


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