Child Labor, Income Shocks, and Access to Credit
Although a growing theoretical literature points to credit constraints as an important source of inefficiently high child labor, little work has been done to assess its empirical relevance. Using panel data from Tanzania, the authors find that hous...
| Main Authors: | , , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2003/05/2874539/child-labor-income-shocks-access-credit http://hdl.handle.net/10986/18222 |
| Summary: | Although a growing theoretical
literature points to credit constraints as an important
source of inefficiently high child labor, little work has
been done to assess its empirical relevance. Using panel
data from Tanzania, the authors find that households respond
to transitory income shocks by increasing child labor, but
that the extent to which child labor is used as a buffer is
lower when households have access to credit. These findings
contribute to the empirical literature on the permanent
income hypothesis by showing that credit-constrained
households actively use child labor to smooth their income.
Moreover, they highlight a potentially important determinant
of child labor and, as a result, a mechanism that can be
used to tackle it. |
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