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WHY DOES CHILD LABOR PERSIST WITH DECLINING POVERTY?
Author(s) -
Sarkar Jayanta,
Sarkar Dipanwita
Publication year - 2016
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/ecin.12234
Subject(s) - economics , human capital , investment (military) , poverty , poverty trap , inequality , differential (mechanical device) , labour economics , distribution (mathematics) , income distribution , economic inequality , overlapping generations model , per capita income , persistence (discontinuity) , demographic economics , economic growth , medicine , political science , mathematical analysis , mathematics , geotechnical engineering , engineering , aerospace engineering , politics , law , pathology
We develop a dynamic overlapping generations model to highlight the role of income inequality in explaining the persistence of child labor under declining poverty. Differential investment in two forms of human capital—schooling and health—in the presence of inequality gives rise to a nonconvergent income distribution in the steady state characterized by multiple steady states of relative income with varying levels of education, health, and child labor. The child labor trap thus generated is shown to preserve itself despite rising per capita income. Policy recommendations include public provision of education targeted toward reducing schooling costs for the poor or raising the efficacy of public health infrastructure. ( JEL I1, J2, O1, O2)