In an environment where children’s time has an economic value and employ- ment opportunities for educated workers are scarce, parental investments in their children’s education may not be driven entirely by poverty and credit constraints. We offer evidence that children’s participation in child labor and schooling re- sponds to economic returns to education in India, which suggests implementing policies that raise the economic benefits of education - such as creating more high- skilled jobs and improving the quality of education - in order to lower child labor and increase schooling.