Econ 5338 Working Paper by Jessica Foumena

1. Econ 5338 Working Paper by Jessica Foumena “Why Should We Care About Child Labor?” The education, Labor Market and Health Consequences of Child Labor” (2004) By Kathleen Beegle, Rakeev Dehejia & Roberta Gatti

2. “Why Should We Care About Child Labor?” (2004)The Authors Kathleen Beegle is a Senior Economist in the Development Research Group of the World Bank. Her research interest includes the measurement of poverty dynamics, socio-economic dimensions of HIV/AIDS in sub-Saharan Africa, and methods in household survey data collection. She received her Ph.D. in Economics from Michigan State University in 1997 and worked at RAND from 1997-2001 before joining the World Bank.  Rajeev Dehejia is an Associate Professor in the Department of Economics and The Fletcher School, Tufts University, a Research Fellow at IZA, Bonn, and a Faculty Research Fellow at the National Bureau of Economic Research. He received his Ph.D. from Harvard University in 1997. His research interests include: econometrics (program evaluation, propensity score and matching methods, and Bayesian applied econometrics), development economics (child labor, microcredit, and financial development and growth), labor economics (financial incentives and fertility decisions), and public economics (religion and consumption insurance). Roberta Gatti is the Social Protection Sector Manager and Lead Economist for Human Development in the Middle East and North Africa region of the World Bank. Until recently, she was part of the Development Research Group of the Bank. Her research includes extensive theoretical and empirical contributions on the economics of child labor and of intergenerational transfers, as well as on corruption, political economy, and growth. She holds a Ph.D. in Economics from Harvard University and has taught courses on development and growth at Georgetown University and Johns Hopkins University.

3. “Why Should We Care About Child Labor?” (2004) • Study Overview • The study focused on the consequences of child labor on socio-economic factors such as education, employment and their health • The research took place over a period of 5 years and was done in Vietnam, a developing country in Asia.

4. “Why Should We Care About Child Labor?” (2004) • Method: Participants, Procedure and Instruments • Data collected from the Vietnam Living Standards Survey (VLSS) were used • Over 4,000 rural households were interviewed in 1992-93 and in 1997-98 • Children were between the ages of 8 and 13 at the time of the 1992-93 survey and the same group was used in 1997-98 • Rice prices and community disasters identified as instruments of child labor--rice prices are associated with reduced child labor and community disaster with an increased in child labor.

5. “Why Should We Care About Child Labor?” (2004) • Method: Participants, Procedure and Instruments • Of the 2,133 children between the ages of 8 and 13 in the sample, 640 worked in the first round of survey • The majority of children working in either the first survey (1992-93) or the follow-up survey (1997-98) were working as unpaid family labor in agriculture or non-agriculture business run by the household • The average work intensity is 7 hours per week but 24 hours per week among children who work • The gender distribution of working children is balanced

6. “Why Should We Care About Child Labor?” (2004) • Results and Observations • Children working in the first survey (1992-93) were less likely to attend school five years later (1997-98) • Contrary to assumption, families send their more gifted children to work, possibly because they are more productive • Child labor did not significantly affect children’s health • The age profile of earning for a person who worked 7 hours per week as a child starts significantly higher, but decreases more rapidly than that for an individual who did not work; age 30 is the cross-over point. • Families with lower discount rates less likely to use child labor • Parents ‘ experience with school greatly influence students’ returns to education

7. “Why Should We Care About Child Labor?” (2004)

8. “Why Should We Care About Child Labor?” (2004) • Results and Observations • Child labor significantly increases with household size • Household wealth has a negative effect on child labor • Landownership is related to wealth however, 20% of landowning households are more likely to use child labor • The distance to primary and secondary school are both positively and significantly associated to child labor

9. “Why Should We Care About Child Labor? The education, Labor Market and Health Consequences of Child Labor” (2004) • Conclusion • Child labor is wrong and not beneficial • Contrary to popular belief, child labor in developing nations is mainly practiced in rural areas and is a low-intensity activity • My opinion as a citizen of Cameroon, a developing nation • Child labor significantly reduces school attainment but the negative effect is cancelled out by an increase of earnings from wage and farm work among those who worked as children • However, the returns to education pays off over time • No significant effects of child labor on health • Child labor is associated to economic benefits to households • The findings help to understand why child labor is still prevalent • If parents are willing to sacrifice their immediate economic gains and to invest money in their children’s education, child labor could be reduced.