Child labor, idiosyncratic shocks, and social policy

Type Journal Article - Journal of Macroeconomics
Title Child labor, idiosyncratic shocks, and social policy
Author(s)
Volume 45
Publication (Day/Month/Year) 2015
Page numbers 394-411
URL https://halshs.archives-ouvertes.fr/halshs-00913666/document
Abstract
In this paper, we provide a dynamic model with heterogeneous agents to study
child labor in an economy with idiosyncratic shocks to employment. Households facing
adverse shocks may use child labor as a buffer to smooth consumption. We show
that the introduction of an unemployment insurance program and/or a universal basic
income system help eliminate child labor endogenously in this context. A calibration
to South Africa in the 1990s is provided.

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