Mortality Risks, Education and Child Labour

Fernanda Estevan, Jean-Marie Baland

Research output: Contribution to journalArticle

Abstract

In this paper, we investigate the role of young adult mortality on child labour and educational decisions. We argue that mortality risks are a major source of risks in returns to education in developing countries. We show that, in the absence of appropriate insurance mechanisms, the level of child labour is inefficient, but it can be too high or too low. It is too high when parents are not very altruistic or anticipate positive transfers from their children in the future. Uncertain returns to education, endogenous mortality or imperfect capital markets unambiguously increase child labour. We also show that a cash transfer conditional on child's schooling can always restore efficiency regarding child labour.
Original languageEnglish
Pages (from-to)118-137
Number of pages20
JournalJournal of Development Economics
Volume84
Issue number1
Publication statusPublished - 2007

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