Academic journal article The Lahore Journal of Economics

The Impact of Public School Enrolment on Child Labor in Punjab, Pakistan

Academic journal article The Lahore Journal of Economics

The Impact of Public School Enrolment on Child Labor in Punjab, Pakistan

Article excerpt


This paper investigates the causal impact of public school enrolment on child labor. Our main hypothesis is as follows: Is school enrolment a substitute for child labor? Recognizing that schooling and work choices are jointly determined by parents in a utility maximizing framework, the study applies an instrumental variable solution to the problem of simultaneity. This approach entails using the receipt of free textbooks and access to a public primary facility as instruments for public school enrolment. Using data from the Multiple Indicator Cluster Survey for 2007/08, our working sample consists of children between 5 and 14 years of age, which makes up 25 percent of the surveyed population. The results suggest that public school enrolment can be used as a substitute for child labor. On average, a 1 percentage point increase in a household's enrolment ratio has the potential to reduce the number of hours of paid labor by almost 5 percentage points, ceteris paribus. This substitutability is highest among poor, urban, male children. Moreover, the incidence of child labor is higher among larger poor families.

Keywords: Child labor, school enrolment, instrumental variable, tobit, fixed effects, education subsidy, Pakistan.

JEL Classification: F66.

(ProQuest: Appendix omitted.)

1. Introduction

Child labor poses a serious challenge for many developing countries, including Pakistan. Other than on humanitarian grounds, it is also undesirable from an economic point of view-it comes at the cost of long-term human capital development. In developing economies-often highly populous but resource-stricken-an improvement in the quality of human capital can prove to be an engine of growth. The development of this asset, however, depends critically on the education of the future work force. However, if parents (as rational agents) prefer work over school for their children, at the micro-level, this will perpetuate poverty by lowering the individual's future value-adding and income generating potential (Glewwe, 2002), trapping the household in a vicious intergenerational cycle of poverty (Baland & Robinson, 2000) (see Figure B1, Appendix B).

In a less extreme scenario where parents combine their children's work with school-the case where either work or school comes out of the child's leisure time-work will still have an adverse impact on the child's learning and, hence, affect the quality of human development. For example, children may miss school (or after-school tutorials) because of work or utilize the time designated for homework for the purpose of work. It has also been argued that work outside the house has a substantial negative impact on learning achievements, attributed mainly to the child's exhaustion and general "diversion of interest away from academic concerns" (Heady, 2003). At the macro-level, child labor possibly limits the economy's growth potential, owing to a low-skilled labor force (Krueger, 1996). Therefore, since any form of child labor before the completion of compulsory education comes at a cost to human capital development, it is considered undesirable (International Labour Organization [ILO]'s Minimum Age Convention, 1973).

Various strategies have been adopted to minimize child labor. Imposing legal restrictions is one option that has been used successfully in some developed countries (Angrist & Krueger, 1991). Hort (1989) provides evidence for decreased child labor following legal restrictions imposed on the cotton industry in Manchester, England. Acemoglu and Angrist (1999) find, that in the US, children living in states with child labor laws are likely to stay in school longer than those in states without child labor laws. Types of legal restrictions include a ban on child labor, minimum age-of-work laws, and compulsory schooling. While compliance with legal restrictions has been witnessed in developed countries, it has failed to achieve the desired goals in low-income countries (Krueger, 1996). …

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