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Malnutrition and Child Labor

Malnutrition and Child Labor In pre‐industrial and developing economies, it is common to find (i) entire families, including children, working together in family farms or urban factories; and (ii) a positive link between a person's consumption and her productivity. This paper argues that there is a natural reason for the concurrence of (i) and (ii). As a rule, households are characterized by intra‐household altruism: an increase in the income of an individual increases the consumption of all household members. Hence, when an employer pays an adult worker a high wage to enhance her productivity, part of it ends up augmenting her children's consumption and productivity. One way for the employer to prevent this leakage and internalize the externality is to employ the children as well. This explains the higher incidence of family labor in poor societies where (ii) is more likely to be true. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Scandinavian Journal of Economics Wiley

Malnutrition and Child Labor

Genicot, Garance
The Scandinavian Journal of Economics , Volume 107 (1) – Mar 1, 2005
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References (62)

Publisher
Wiley
Copyright
Copyright © 2005 Wiley Subscription Services, Inc., A Wiley Company
ISSN
0347-0520
eISSN
1467-9442
DOI
10.1111/j.1467-9442.2005.00396.x
Publisher site
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Abstract

In pre‐industrial and developing economies, it is common to find (i) entire families, including children, working together in family farms or urban factories; and (ii) a positive link between a person's consumption and her productivity. This paper argues that there is a natural reason for the concurrence of (i) and (ii). As a rule, households are characterized by intra‐household altruism: an increase in the income of an individual increases the consumption of all household members. Hence, when an employer pays an adult worker a high wage to enhance her productivity, part of it ends up augmenting her children's consumption and productivity. One way for the employer to prevent this leakage and internalize the externality is to employ the children as well. This explains the higher incidence of family labor in poor societies where (ii) is more likely to be true.

Journal

The Scandinavian Journal of Economics – Wiley

Published: Mar 1, 2005

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