Mortality Risks, Education and Child Labour

Jean-Marie Baland and Fernanda Estevan

No 5972, CEPR Discussion Papers from C.E.P.R. Discussion Papers

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. When the level of child labour is inefficiently high, we also show that a cash transfer conditional on child's schooling can always restore efficiency regarding child labour.

Keywords: Child labour; Education; Mortality risks; Old-age security motive; Conditional cash transfers (search for similar items in EconPapers)
JEL-codes: D13 D81 H31 I00 O12 (search for similar items in EconPapers)
Date: 2006-12
New Economics Papers: this item is included in nep-dev, nep-edu, nep-hea and nep-pbe
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Journal Article: Mortality risks, education and child labor (2007)
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