How to Deal with Covert Child Labour, and Give Children an Effective Education, in a Poor Developing Country: An Optimal Taxation Problem with Moral Hazard

Alessandro Cigno

No 3077, CESifo Working Paper Series from CESifo

Abstract: Given that credit and insurance markets are imperfect, and given also that intra-household transfers, and much of the work a child does, are private information, the second-best policy uses a combination of need and merit based education awards, together with a mix of taxes on parental income, and on the return to educational investment. It also makes school enrollment compulsory and, if the child wage rate is sufficiently high, sets a ceiling, decreasing in parental income, on overt child labour.

Keywords: child labour; education; uncertainty; moral hazard (search for similar items in EconPapers)
JEL-codes: D82 H21 H31 I28 J24 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (2)

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Working Paper: How to Deal with Covert Child Labour, and Give Children an Effective Education, in a Poor Developing Country: An Optimal Taxation Problem with Moral Hazard (2010)
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