Child Labour

From a recent World Bank research paper on child labour:

Although there is extensive literature on the determinants of  child labor and many initiatives aimed at combating it, there is  limited evidence on the consequences of child labor on  socioeconomic outcomes such as education, wages, and health. Beegle, Dehejia, and Gatti evaluate the causal effect of child  labor participation on these outcomes using panel data from  Vietnam and an instrumental variables strategy. Five years subsequent to the child labor experience, they find significant  negative effects on school participation and educational  attainment, but also find substantially higher earnings for  those (young) adults who worked as children. The authors find no  significant effects on health. Over a longer horizon, they estimate that from age 30 onward the forgone earnings  attributable to lost schooling exceed any earnings gain  associated with child labor and that the net present discounted  value of child labor is positive for discount rates of 11.5  percent or higher. The authors show that child labor is  prevalent among households likely to have higher borrowing  costs, that are farther from schools, and whose adult members  experienced negative returns to their own education. This  evidence suggests that reducing child labor will require  facilitating access to credit and will also require households  to be forward looking.

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