Barriers to Capital Accumulation and the Incidence of Child Labor

Author/Editor:

Marco A Espinosa-Vega ; Richard C. Barnett

Publication Date:

November 1, 2005

Electronic Access:

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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.

Series:

Working Paper No. 2005/220

Subject:

Capital accumulation Consumption Human capital Labor Labor supply

English

Publication Date:

November 1, 2005

ISBN/ISSN:

9781451862393/1018-5941

Stock No:

WPIEA2005220

Pages:

23

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