Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/232814 
Year of Publication: 
2021
Series/Report no.: 
IZA Discussion Papers No. 14062
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
This paper revisits the causes behind child labor supply by focusing on an aspect that has received little attention: the link between the household head's risk and time preferences and observed child labor supply. We develop a theoretical model and empirically test for this causality using data from the seventh round of the Ethiopian Rural Household Survey. We find child labor to be increasing in both higher adult discount rates and higher degrees of risk aversion, and this finding is robust across alternative empirical approaches. Higher discount rates favor current consumption which is financed in part by child labor income while high risk aversion to future income (due to either low or uncertain returns to education) favor child labor at the expense of schooling.
Subjects: 
risk and time preferences
education
child labor
Ethiopia
JEL: 
C93
J43
O55
Document Type: 
Working Paper

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