Child labour and schooling in developing countries: a review of the literature

Abstract

This paper shows that there is a trade-off between child labour and schooling. The costs (both direct and indirect cost) and benefits from education are considered by parents in making schooling and child labour decisions. Evidence seems to support the view that although some work can help children to acquire human capital (in the form of on-the-job training, and the money earned from child labour makes school possible for children themselves), in general, child labour lowers the acquisition of education and human capital. Moreover, the adverse effect of child labour on schooling outcomes is likely to be increased if a child spends more time on labour activities outside the home. Easy and improved access to the credit market can significantly increase school attendance and reduce child labour. Income transfer programmes, targeting the households living below poverty line, can help to stimulate demand for education by reducing the cost of education. The introduction of compulsory schooling in a given period and retributive taxation from adults to elderly people in the following period could be an effective strategy to eradicate child labour. Therefore, it has been found that an increase in the supply of education is not enough to ensure school enrolment; the demand side of education should also be targeted.