Parental income, child labour, and human capital accumulation: evidence from trade liberalisation in India. Issue 8 (17th November 2018)

• Record Type: Journal Article
• Authors: Ajefu, Joseph Boniface
• Is Part Of: Development in practice. Volume 28:Issue 8(2018)
• Page Start: 1071
• Page End: 1082
• Publication Date: 2018-11-17
• Subjects: Globalisation (inc trade -- private sector) -- Labour and livelihoods -- Social sector – Education -- South Asia; Technical assistance -- Developing countries -- Periodicals; Economic assistance -- Developing countries -- Periodicals; Developing countries -- Economic conditions -- Periodicals; 338.91091724
• DOI: 10.1080/09614524.2018.1505828
• Languages: English
• ISSNs: 0961-4524

Abstract

ABSTRACT: This article examines whether parental income affects decisions on children's human capital investment and labour market participation. India's sudden and unanticipated trade liberalisation was a national policy that created an exogenous variation in industry-specific tariff rates over time. The policy consequently led to variation in workers' earnings according to their industrial affiliations. The disparity in earnings across industries provides a good setting for identifying the causal effect of parents' income on child's labour and schooling, using an instrumental variables approach. The study finds a positive effect of parents' income on children's schooling but a negative effect on children's work. The magnitude of effect, however, is higher for girls compared to boys.