Abstract
This paper examines the influence of adult market wages and having parents who were child labourers on child labour, when this decision is jointly determined with child schooling, using data from Egypt. The empirical results suggest that low adult market wages are key determinants of child labour; a 10% increase in the illiterate male market wage decreases the probability of child labour by 22% for boys and 13% for girls. The findings also indicate the importance of social norms in the intergenerational persistence of child labour: parents who were child labourers themselves are on average 10% more likely to send their children to work. In addition, higher local regional income inequality increases the likelihood of child labour.
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Notes
This accounted for a little less than one fifth of all children between 5 and 14 years old in 2000—ILO (2002).
They find that school enrolment subsidy in Bangladesh increased school attendance but reduced the incidence of child labour by only a small proportion.
The fact that children may be working and going to school at the same time may affect their educational attainment is beyond the scope of this study but is important.
Bhalotra and Heady (2003) use community-level variables to instrument household income in rural Ghana and Pakistan. Bhalotra (2001) instruments out household income and child wage and estimates structural labour supply models for rural boys and girls in wage work. She finds a significant negative wage elasticity for boys, whereas the wage elasticity for girls is not significantly different from zero in rural Pakistan. She does not study the impact of adult market wages though.
Rosenzweig and Evenson (1977) provide the basic model in this literature analysing the joint family decision regarding the number of children and children's time allocated to schooling and work and show that Indian families have many children as a result of the high return to the use of child labour.
Diamond and Fayed (1998), using a flexible form production function, show that adult male labour is a complement to child labour, while adult female labour is a substitute to child labour in Egypt.
It is worth noting that this paper provides an alternative explanation for the intergenerational persistence of child labour as compared to what Emerson and Souza (2003) suggested. However, neither paper can provide a definitive test for its suggested explanation.
Swinnerton and Rogers (2000) show that a more equal income distribution can reduce child labour in higher productivity countries but not in low productivity countries. They find supporting empirical evidence using cross-country data and the Gini coefficient as the measure of inequality.
There are 26 governorates/provinces and six regions in Egypt. Four provinces (Cairo, Alexandria, Port Said and Canal Cities) are urban only, while the rest of the provinces are made up of both urban and rural areas.
The 1988 LFSS survey included, for the first time, several individual modules, which collected extensive data on particular aspects, e.g. labour market earnings, migration and child labour. See Fergany (1991) for a detailed discussion on the sampling and questionnaire design of the 1988 LFSS.
The 1988 LFSS adopted the 1982 ILO definition of employment. Hence, unpaid family work is considered economic activity except if it results in goods and services meant entirely for household consumption.
This legislation does not apply to family businesses, domestic work or agriculture. However, the minimum working age is lower than the required age of compulsory education which is 15 years.
Data on the number of working hours and days are only available for 1,154 out of 1,988 working children.
Canagarajah and Coulombe (1997) and Nielsen (1998) also use bivariate probits. However, various other estimation techniques have been used to capture different decision making processes: Patrinos and Psacharopoulos (1997) and Jensen and Nielsen (1997) assume that the two decisions are independent and therefore use logit models; Grootaert (1998) uses a sequential binary probit model where a certain hierarchy of choices is assumed to capture a sequential decision making process.
Since using grouped (aggregated) data in individual level regressions can potentially result in the standard errors being biased because of the correlation of the error term across individuals in a region or industry (Moulton 1990), I correct for the correlation of error terms across individuals within province. In addition, the robust (Huber/White/sandwich) estimator of the variance is used in place of the conventional Maximum Likelihood Estimation variance estimator.
Market wages are calculated using the 1988 LFSS earnings module, which was conducted on a sample of 15,000 workers. Relative wages are used as opposed to absolute wages for normalisation purposes. The correlation between child wage and illiterate adult wages is weak: the child–male wage correlation is 0.056, and the child–female wage correlation is 0.275. However, the male–female wage correlation is 0.396.
Data on the “Gini” coefficient are from Egypt: Human Development Report 1994 and measure expenditure based on household budget surveys that capture earnings, non-labour income and wealth. The 1988 LFSS did not collect information on individual household expenditure or landholdings.
Levy (1985) also finds that wage–child effect has the right sign but is not significant.
Levy (1985) uses pooled cross-section (at the governorate level) and time series data (for the period 1974–1977) to examine the importance of cropping pattern and mechanisation for family size and child schooling in rural Egypt. He estimates simultaneously a set of regression equations explaining the regional variation in fertility, school enrolment and child labour participation rates.
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Acknowledgements
I would like to thank Sally Srinivasan, Yves Zenou, three anonymous referees and the editor for helpful comments. I am grateful to Barry McCormick for valuable comments and suggestions.
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Communicated by Deborah Cobb-Clark
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Wahba, J. The influence of market wages and parental history on child labour and schooling in Egypt. J Popul Econ 19, 823–852 (2006). https://doi.org/10.1007/s00148-005-0014-2
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DOI: https://doi.org/10.1007/s00148-005-0014-2