This paper exploits a natural experiment approach to identify the impact of legislation (Employment of Children Act 1991) in Pakistan on participation of children in the labor markets. The law prohibits employment of children less than 14 years of age in sectors other than agriculture or household enterprises. With micro-data, making use of regression discontinuity data design, the study finds some evidence that the Employment of Children Act 1991 helped in reducing the employment of children immediately after its implementation.

The empirical analysis in this paper makes use of micro-level data from the Pakistan Integrated Household Survey 1991, (PIHS 1991). The data set consists of 35,774 individuals of all ages, of which 4480 are aged 10-14 with 2348 boys and 2132 girls.