Working Paper: CEPR ID: DP6772
Authors: Eric V. Edmonds; Nina Pavcnik; Petia Topalova
Abstract: Does trade policy influence schooling and child labor decisions in low income countries? We examine this question in the context of India's 1991 tariff reforms. Overall, in the 1990s, rural India experienced a dramatic increase in schooling and decline in child labor. These trends were attenuated in communities where employment was concentrated in industries loosing tariff protection. The data suggest that this failure to follow the national trend of increasing schooling and diminishing work is associated with a failure to follow the national trend in poverty reduction. Schooling costs appear to play a large role in this relationship between poverty, schooling, and child labor. Extrapolating from our results, our estimates imply that roughly half of India's rise in schooling and a third of the fall in child labor during the 1990s can be explained by falling poverty and therefore improved capacity to afford schooling.
Keywords: child labour; India; literacy; schooling; trade liberalization
JEL Codes: F13; F14; F16
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Trade liberalization (tariff reductions) (F13) | Schooling attendance (I21) |
| Tariff declines (F14) | Schooling attendance (I21) |
| Poverty (I32) | Schooling attendance (I21) |
| Schooling costs (I21) | Schooling attendance (I21) |
| Tariff declines (F14) | Child labour demand (J82) |
| Child labour demand (J82) | Schooling attendance (I21) |
| Tariff declines (F14) | Shift in child time allocation (J29) |