Working Papers, Department of Economics, Lund University
Role of Parental Expectations in Determining Child Labour and Schooling
() and Rama Pal
Abstract: The paper shows how parental expectations about child’s
future income affect the incidence of child labour and schooling. We
present a theoretical framework where parents decide on the optimal amount
of time invested in child education in presence of uncertainty about
returns to education. Here, the uncertainty is captured using the
probability that parents attach to higher returns after education. Our
theoretical findings underscore the need for policy interventions that
affect time preferences of parents, for any wage regulations to enhance the
extent of child education. On the empirical side, we use a longitudinal
survey (Young Lives Survey) for children in Andhra Pradesh, India; to
measure the effect of parental expectations on investment in schooling.
This longitudinal survey allows us to first, estimate the probability that
parents assign to the expectation that their child will get a skilled job
in future. And then, we examine the impact of these parental expectations
on probability of schooling decision as well as the amount of child’s time
allocated for studies. Our findings suggest that child’s inherent ability,
parental education and parents’ attitude towards education influence the
parental expectations about child’s future job. Parental expectations in
turn positively affect the investment in human capital. Interestingly, we
find a negative impact of the average child wage in community, on both
probability of schooling and the proportion of study hours only for boys.
This result reflects the ambiguity predicted by our theoretical model, in
the effect of child wage on child labour. Our empirical results also
indicate that even free education may not encourage child education if
parents lack faith in the society to provide skilled jobs.
Keywords: Parental expectations; Uncertainty; Child labour; (follow links to similar papers)
JEL-Codes: D84; D91; J24; (follow links to similar papers)
31 pages, March 29, 2016
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