Working Papers in Economics,
University of Gothenburg, Department of Economics

Abstract: There are several factors that may contribute to the decision to send a child to work, such as poverty, market imperfections and parental preferences. The aim of this paper is to determine empirically the relative importance of these diverse factors on the incidence of child labor in rural India. In order to examine several potentially influential factors separately, we outline a theoretical model of child labor in a peasant household based on the model presented in Bhalotra and Heady (2003) with modifications to allow for the child to participate in different types of labor. We then use the theoretical model to specify and estimate an empirical model of rural child labor participation. Our results indicate that parental education and household income appear to play the most important role in determining whether a child works, attends school or is idle. Market imperfections, on the other hand, only play an important role in determining whether the child participates in family labor.

Keywords: child labor; school attendance; market imperfections; India

JEL-codes: I20; J13; J21

44 pages, June 19, 2007

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