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Child labour and inequality

D'Alessandro, Simone and Fioroni, Tamara (2011): Child labour and inequality.

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Abstract

This paper focuses on the evolution of child labour, fertility and human capital in an economy characterized by two type of individuals, low and high skilled workers. This heterogeneity allows for an endogenous analysis of inequality generated by child labour. More specifically, according to empirical evidence, we oer an explanation for the emergence of a vicious cycle between child labour and inequality. The basic intuition behind this result is the interdependence between child labour and fertility choices: unskilled parents tend to have a high number of children and to send them to work whereas skilled parents tend to have a low fertility rate and a high investment in education. The differential fertility between high and low skilled increases the fraction of unskilled workers in the labour market which in turns reduces unskilled wage. The fact that children can oers only unskilled labor reinforces such process creating a vicious cycle between child labour and inequality.

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