Working Paper: NBER ID: w15345
Authors: Eric V. Edmonds; Norbert Schady
Abstract: How important are subsistence concerns in a family's decision to send a child to work? We consider this question in Ecuador, where poor families are selected at random to receive a cash transfer that is equivalent to 7 percent of monthly expenditures. Winning the cash transfer lottery is associated with a decline in work for pay away from the child's home. The cash transfer is greater than the rise in schooling costs that comes with the end of primary school, but it is less than 20 percent of the income paid to child laborers in the labor market. Despite being less than foregone earnings, poor families seem to use the lottery award to delay the child's entry into paid employment and protect the child's schooling status. Schooling expenditures rise with the lottery, but total expenditures in the household decline relative to the control population because of foregone child labor earnings.
Keywords: Child Labor; Cash Transfers; Poverty Alleviation
JEL Codes: I38; J22; J82
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| winning the cash transfer lottery (H27) | decline in child labor (J88) |
| BDH cash transfer (F35) | delay entry into paid employment (J68) |
| BDH cash transfer (F35) | rise in schooling expenditures (H52) |
| BDH cash transfer (F35) | decline in child labor among poorest families (J89) |
| economic status (P46) | child labor (J82) |