Barriers to Capital Accumulation and the Incidence of Child Labor

By Marco A Espinosa-Vega, Richard C. Barnett

November 1, 2005

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Marco A Espinosa-Vega, and Richard C. Barnett Barriers to Capital Accumulation and the Incidence of Child Labor, (USA: International Monetary Fund, 2005) accessed November 23, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

The World Bank documents an inverse relationship between GDP per capita and child labor participation rates. We construct a life-cycle model with human and physical capital in which parents make a time allocation choice for their child. The model considers two features that have shown potential in explaining differences in states of development across nations. These are a minimum consumption requirement, and barriers to physical capital accumulation. We find the introduction of capital barriers alone is not enough to replicate the aforementioned observation by the World Bank. However, we find the interplay of a minimum consumption requirement and barriers to capital may enhance our understanding of child labor and the poverty of nations. Additionally, we find support for policies aimed at reducing capital barriers as a means to reduce child labor.

Subject: Capital accumulation, Consumption, Human capital, Labor, Labor supply

Keywords: Child labor, WP

Publication Details

Pages:

23
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2005/220
Stock No:

WPIEA2005220
ISBN:

9781451862393
ISSN:

1018-5941

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