Description:

Devis Decet (Northwestern): Child Labour, Human Capital and Beliefs (with Kaman Lyu)

Abstract:  Child labour is pervasive and rising in African countries. Our paper tests a novel hypothesis to explain child labour on family farms. Parents are allocating work instead of school because they view child labour as another dimension of human capital formation. Parents are not undervaluing education. They believe that working on farms is an investment in agricultural skills which can yield higher returns than investments in schooling if the child will be a farmer in the future. We design and implement a survey for 5,000 households in Ghana to elicit parental beliefs on the returns to child labour. Exploiting vignettes, we find that parents believe that a child who works on family farms alongside schooling will be more productive as a farmer than if they attained two more years of schooling with no farming experience. We then test whether parents act accordingly to these beliefs. We find that parents with strong beliefs on the returns to child labour on the farm are more likely to put their child to work on family farms if the child is designated to become a farmer. On the contrary, parents with strong beliefs on the returns to secondary education are more likely to have their child in school if the child is designated to become a white-collar worker.