Do households resort to child labor to cope with income shocks?

Kathleen Beegle, Rajeev Dehejia () and Roberta Gatti ()
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Roberta Gatti: World Bank - Development Research Group (DECRG)

No 0203-12, Discussion Papers from Columbia University, Department of Economics

Abstract: Using four rounds of panel household data from the Kagera region of Tanzania, we show that transitory income shocks ¨C measured by the value of crop lost by farming households ¨C lead to significantly increased child labor. A one standard deviation increase in the shock is associated with a 10% increase in mean child working hours. Moreover, we find that households with collateralizable assets ¨C which we interpret as a proxy for access to credit ¨C are better able to offset the effects of income shocks. This evidence supports the view that credit market imperfections are an important determinant of child labor.

Date: 2002
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