Macroeconomic Implications of Child Labor Laws and Marital Sorting

University Of Pennsylvania, Philadelphia PA

Investigators

Abstract

The objectives of this research project are to develop a microeconomic theory that explains the prevalence of laws that restrict parental decisions regarding the education and labor supply of their children. The basic idea is that such laws enable parents to commit to a higher level of education for their children, because in the absence of such laws, poor parents may be too impatient for additional consumption. In the longer run, this theory may serve as a prototype for investigations concerning the -relation between economic inequality and growth, as well as a positive model of the adoption of coercive social policies such as compulsory full-time education. The current stage of the project consists of developing anal testing a static model of child -labor restrictions, anal exploring some of the policy implications of the model, using household survey data from Africa, Asia and Latin America. This work will lead to the development of a proposal for a longer-term project to develop a dynamic equilibrium analysis of child labor on the basis of our findings from the research based on the static model.