The Impact of a Rise in Expected Income on Child Labor: Evidence From Coca Production in Colombia

Diego A. Martin
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Diego A. Martin: Harvard's Growth Lab

No 217, Growth Lab Working Papers from Harvard's Growth Lab

Abstract: Can households' beliefs about future income shocks affect child labor? This paper examines whether the three-year gap between the announcement (in 2014) and the start (in 2017) of the Illicit Crop Substitution Program (ICSP) increased child labor in Colombia. The ICSP provides farmers with financial support for not planting and harvesting coca leaves – the key input of cocaine. My results from a difference-in-differences model using differences in historical coca production show that due to the ICSP announcement, children became four percentage points more likely to work in municipalities with historical coca production than in non–coca-growing areas. Although the likelihood of working increased in coca–growing areas, the hours worked per child declined modestly after the ICSP announcement. The expansion of the children working in coca fields but the decline in working hours per child produce null effects of the announcement on education outcomes. The rise in the expected income affects the time allocation decision within households in rural areas.

Keywords: Child labor; Coca cultivation; Anticipated effects; Policy announcements (search for similar items in EconPapers)
JEL-codes: J13 J22 K42 O13 (search for similar items in EconPapers)
Date: 2023-06
New Economics Papers: this item is included in nep-dev
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