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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.

Keywords: Child labour, School Attendance, School Achievement, Costs of Education and Benefits of Education

Article Type:
Report
Subject:
Financial markets
Developing countries
Cost benefit analysis
Author:
Khanam, Rasheda
Pub Date:
07/01/2010
Publication:
Name: International Journal of Business Research Publisher: International Academy of Business and Economics Audience: Academic Format: Magazine/Journal Subject: Business, international Copyright: COPYRIGHT 2010 International Academy of Business and Economics ISSN: 1555-1296
Issue:
Date: July, 2010 Source Volume: 10 Source Issue: 3
Topic:
Computer Subject: Cost benefit analysis
Geographic:
Geographic Code: 0DEVE Developing Countries
Accession Number:
243957219
Full Text:
1. INTRODUCTION

Most of the literature on child labour has discussed the issue of child labour in connection with education. Connecting child labour with education is very logical, as child labour is defined as an economic activity of a child that affects the child's leisure, health and particularly educational activities. Therefore, it points to a normative view that every child, regardless of his or her background, should have the right to receive at least a minimum amount of schooling. This is because childhood is considered as the best time for the acquisition of education, so childhood should be devoted to the accumulation of human capital, particularly through formal schooling. Hence, any discussion of child labour will lose importance if schooling is not incorporated into it. Also, as it is a widely held view that work reduces the time available for schooling by competing for the child's time with the alternatives of schooling and leisure, it is therefore important to see whether child labour helps or hurts the accumulation of human capital of children.

2. DETERMINANTS OF CHILD LABOUR AND SCHOOLING

There is an increasing number of literature that has focussed on child labour and schooling. For example, Jensen and Nielsen (1997) explored the effects of school attendance and child labour, using data from Zambia. The results suggested that both economic and sociological factors are responsible for the choice between school attendance and child labour. According to their study, factors such as an imperfect capital market and whether or not the household heads work affects school attendance. For example, if the household head works in a formal sector it increases the likelihood of the child's school attendance. Canagarajah and Coulombe (1997) found from their econometric analysis that household's welfare is highly correlated with school participation and weakly correlated with the incidence of child labour. Fathers with a relatively high level of education are likely to have a negative effect on the likelihood of the child working, while mothers' education affects only school participation. Khanam (2004) also revealed similar effects of parental education on schooling of Bangladeshi children. Ray's (2000) analysis indicated a gender difference in girls' schooling in Pakistan and Peru; the bias (the estimated coefficient is higher for Pakistan) was much stronger in Pakistan than in Peru. Older Pakistani girls (age group of 10-14 years) drop out from schooling completely to participate in the labour market.

Akabayashi and Psacharopoulos (1999) found a positive effect of the mother's education and the availability of schools on school attendance of girls in Tanzania. More siblings in the household make it possible for female children to avoid household chores and find time to attend school. However, using data from Bangladesh, Khanam (2007) found that an increase in the number of pre-school children in the household increases the probability that a girl will combine school with work relative to the probability of study only. She also found that an increase in the number total household member raises the probability that a school-age child will study only relative to the probability that the child will work only or combine work and study. Palacious (1981) reported that parents in Colombia consider schooling as an obstacle to learning working skills, as schools were scattered, curricula were irrelevant for the needs of the rural poor, and educational equipments were inadequate.

3. IMPACT OF WORK ON SCHOOLING

There is a continued debate about whether working while in school helps or hinders the prospect of a child. One school of thought argues that a child can earn valuable human and psychological capital through working while at school, in terms of self-esteem, competence, responsibility and skills that make him or her confident to perform better in school and later in the labour market (Mortimer and Johnson 1997). This argument is supported by many studies from developing countries. These studies found that child labour does not hurt schooling, and perhaps, it makes school possible for working children and for their siblings. For instance, Ravallion and Wodon (2000), in their study on Bangladesh, concluded that the adverse consequence of child labour on schooling is likely to be very small. Binder and Scrogin (1999) found in western Mexico that the academic performance of working children is not lower relative to children who do not work, although work reduces the hours of human capital investment. Patrinos and Psacharopoulos's (1997) study on Peru also documented that child labour is not harmful for schooling.

Another school of thought, however, argued that child labour adversely affects a child's human capital formation in various ways See, for example, Heady (2003), Nielsen (1998), Psacharopoulos (1997), Akabayashi and Psacharopoulos (1999), Canagarajah and Coulumbe (1997), Gunnarsson et al. (2003), Maitra and Ray (2002), Rosenzweig and Evenson (1977), Rosatti and Rossi (2003) and Sasaki and Temesgen (1999), Khanam (2004) and Khanam (2007). It also hampers child health, physical and mental development. Child labour hurts school enrolment, attendance and, particularly, school achievement (Khanam and Ross 2008). A study by Boozer and Suri (2001) on Ghana found that an hour of child labour decreases school attendance by .38 hours. Similarly, Lavy (1985) and Rosenzweig and Evenson (1977) found that child labour markets lower school enrolment and attendance. Khanam (2004) explored the linkages between child work and both school attendance and school attainment of children aged 5-17 years using data from a survey based in rural Bangladesh. The central message from this study is that child labour adversely affects the child's schooling, which is reflected in lower school attendance and lower grade attainment. Using the 199596 Household expenditure survey of Bangladesh, Amin, Quayes and Rives (2006) also found that child labour decreases the probability of continuous schooling for Bangladeshi children.

The UNESCO also reported that about 18 per cent of children of primary school-going age, that is, 110 million did not go to school in 1995; it is assumed that a majority of them were engaged in economic activities (UNESCO 1996, as cited in ILO/UNICEF 1997). In Peru, 67 per cent of working children are out of formal education (Matz 2002, p. 2). According to available national surveys, from 50 per cent to 70 per cent of working children combine schooling with child labour (ILO/UNICEF 1997). In many third-world countries, children usually go to school for fewer hours and work for longer hours.

4. CHILD LABOUR AND SCHOOL ACHIEVEMENT

While most of the studies on the consequences of child labour on schooling have paid attention to school enrolment or attendance, only a few studies (See for example, Heady 2003; Psacharopoulos 1997; Admassie and Bedi 2003; Gunnarsson et al. 2003 and Rosatti and Rossi 2003, Khanam and Ross 2008) have examined the effect of child labour on academic achievement or cognitive attainment. Lower school enrolment or attendance may not represent the real consequences of child labour, because these are simply indicators of time inputs for schooling, not learning outcomes. Child labour could harm school achievement without hurting school enrolment and even school attendance, which is possible by reducing the leisure of a child. A few studies have attempted to identify the effects of child labour on learning outcomes rather than simply school attendance or enrolment.

In Ghana, for instance, Heady (2003) analysed the effect of children's economic activity on their level of learning achievement. The result showed that work has a substantial effect on the learning achievement in the key areas of reading and mathematics. Work has a much larger effect on advanced mathematical scores than that of advanced reading scores. This effect is substantial on children's mathematical skills, if they work outside the home. Therefore, Heady concluded that children who worked as well as attending school found themselves as being less able to learn as a result of exhaustion or a lack of time to complete homework or a diversion of interest away from academic concerns.

Analysing the household survey data from two Latin American countries, Bolivia and Venezuela, Psacharopoulos (1997) concluded that working children have three times more likely to fail a grade in school. He found that child labour reduces the educational attainment by about two years of schooling for working children, relative to the non-working children. Similarly, in Pakistan and Nicaragua, Rosati and Rossi (2003) documented that increased hours of working were associated with poorer test scores. In this connection, Gunnarsson et al.'s (2003) study examining the effect of child labour on the academic achievements of 11 Latin American countries found that children who work sometimes outside the home scored 12 per cent lower than the children who never worked in the labour market. Children working frequently outside home scored up to 16 per cent lower than children who never worked.

Admassie and Bedi's (2003) findings in rural Ethiopia regarding the consequences of work on the formal human capital development of children are interesting. Admassie and Bedi detected a nonlinear relationship between the hours of work and the school attendance/reading and writing ability (RWA) of children. They found a positive link between working and schooling/RWA initially. However, RWA began to suffer if a child worked between 16-22 hours per week, although it had no effect on school attendance. If a child worked beyond this threshold, both school attendance and RWA suffered. Khanam and Ross (2008) found that school attendance and grade attainment were lower for children who were working.

From the above discussion it can be concluded that child labour lowers school achievement in every country. Also, these adverse effects of child labour on schooling outcomes are likely to be increased if a child spends more time on labour activities outside the home (Heady 2003; Gunnarsson et al. 2003), and if the child works beyond a certain threshold of hours (Admassie and Bedi's 2003). Thus, the perceived view from the literature on child labour and schooling is that although some work can be useful for a child, in most cases the benefits of work are outweighed by its harmful effects on a child's physical, mental and intellectual development.

5. COSTS AND BENEFITS OF EDUCATION

The parents' decisions regarding whether a child will attend school or work are influenced by the cost and benefits of education and job opportunities. Households incur direct costs (such as school tuition, books and supplies and school uniforms) and indirect costs or opportunity costs (such as time spent in the classroom, travel time, and schoolwork at home) from enrolling a child in school. The time allocated for schooling is input for education, which could otherwise be used for market work or home production, and, hence, time spent on schooling represents forgone income or gains to the household. Therefore parents take into account the direct cost as well as the opportunity cost of enrolling a child in school. A child will be sent to work if the cost of schooling is higher than the benefit. Schooling creates long-term effects that have effects on children; on the other hand the cost of education is incurred in the short-term and will be borne by the parents.

The cost of schooling may vary substantially between countries and within countries. For example, in a study on Bangladesh, Ahmed and Quasem (1991) observed a higher rate of school enrolment in a more developed village where better facilities were available. Similarly, in Tanzania, Akabayashi and Psacharopoulos (1999) revealed that in areas with a lower school concentration children worked longer hours. Therefore, poor school facilities, poor quality of education, and long and costly travel to school make it difficult even for the middle-income households to send the children to school. On the other hand, even the poorest families can send their children to school in areas where good quality free education is offered (Grimsrud 2001, p. 15). This can explain why some studies fail to find an income effect in school participation rates.

In the case of Ghana, however, it is found that the cost of schooling can keep the children away from school (Canagarajah and Coulombe 1997). The cost of education is also found to be a significant barrier to school enrolment and completion for Egyptian children (Datt, Jolliffe and Sharma 1997). The Survey of Child Labour in Egypt (1991) also documented that 42 per cent of the families of working children think that school expenses are very heavy for them. In Zambia, Nielsen (1998) found that the effects of reducing education expenses by K1000 (An exchange rate of K420= US$1 is used in Nielsen, 1998 )would be an increase in school attendance by about three percentage points in rural areas and an increase in school attendance by less than 1 per cent in the urban areas. It may also be the case that the high costs of education push the children in the labour market so that they can afford schooling for themselves or for their siblings. The lack of a credit market for education in the developing countries makes the situation worse. Further, low or declining returns of schooling put extra pressure on households regarding the schooling decisions for the children, and the result may be that children are kept away from school to avoid educational costs.

Further, in many poor countries, the school curriculum is likely to be irrelevant to the practical needs, teachers are unqualified or inexperienced, the logistical supports are negligible, and classrooms are unavailable or very small compared to the number of students. As a result, quality education is almost absent, which discourages the parents from sending their children to school. They consider school as a waste of time, as there is no guarantee of getting a job after completion of study. Rather, parents can financially benefit if the children work.

6. CONCLUSIONS AND POLICY ISSUES

The studies reviewed in this paper point out 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. Therefore, child labour has an opportunity cost in the form of forgone human capital.

The elimination of child labour depends on the quality and relevance of education services. Sometimes formal education is, however, too stiff and rigid to meet the demands of the poor children. Therefore, formal education should not be considered as the only option, it should have some flexibility along with other options, such as education and training. On the other hand, informal education is too flexible, with low-quality education that cannot ensure further education and training instead of literacy.

Easy and improved access to the credit market can significantly increase school attendance and reduce child labour, as has been found to be the case in Africa (Canagarajah and Nielson 1999). Income transfer programmes, targeting the households living below poverty line can help to stimulate demand for education by reducing the cost of education. For instance, a targeted subsidy has been found to be very effective in reducing child labour (Udry 2003). In the case of Bangladesh, Ravallion and Wodon (2000) found that a targeted subsidy is more effective for increasing school enrolment and attendance than in reducing child labour. In the case of Bangladesh, Ravallion and Wodon (2000) found that a targeted subsidy is not so effective in reducing child labour, as it is found to be effective to increase school enrolment and duration. In this case, increased school enrolment and school attendance may come at the expense of leisure instead of labour. Hazan and Berdugo (2002) also suggested that 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. They suggested this policy, as Baland and Robinson (2000) claimed that if parents invest for a child's schooling in one generation, children might not compensate their parents in the next generation, as intergenerational contracts cannot be enforced. Retributive taxation can compensate parents for the forgone earnings of their children. 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.

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Rasheda Khanam, University of Southern Queensland, Toowoomba, QLD, Australia

AUTHOR PROFILE:

Dr. Rasheda Khanam comes to the University of Southern Queensland (USQ) from the University of Queensland (UQ) where she was a Postdoctoral Research Fellow at the Australian Centre for Economic Research on Health (ACERH). She gained a PhD in Economics from the University of Sydney. In addition to her teaching commitments at the USQ, the UQ, the University of Sydney and the University of Chittagong over a period of 11 years, Dr Khanam has been actively involved with research in the areas of Development Economics, Health Economics and Labour Economics. She has published in prestigious economics journals including the Journal of Health Economics and the Journal of Economic Issues. Her research interests intersect with Development Economics, Labour Economics and Health Economics.
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