Child Labor, Idiosyncratic Shocks, and Social Policy

Alice Fabre (1) , Stéphane Pallage (2)

1 GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille
2 CIRPEE - Centre interuniversitaire sur le risque, les politiques économiques et l'emploi [Montréal]

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.

Mots clés: idiosyncratic shocks; unemployment insurance; child labor; universal basic income; heterogeneous agents; child labor ban

Domaines: Economies et finances

Alice Fabre, Stéphane Pallage. Child Labor, Idiosyncratic Shocks, and Social Policy. 2013. ⟨halshs-00913666⟩