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Child labor, education aid, and economic growth

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  • Kitaura, Koji

Abstract

This paper studies the effects of education aid fungibility on growth and welfare in developing countries. We consider a three-period-lived overlapping generations economy in which children are potential workers and then individuals face the trade-off between education and child labor. We show that there exists the optimal tax rate when the government gets aid money to be spent on cash transfer and public education in the incidence of child labor. We further demonstrate that there is a case in which an increase in the allocation of public education reduces the tax burden on the economy.

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  • Kitaura, Koji, 2009. "Child labor, education aid, and economic growth," Journal of Macroeconomics, Elsevier, vol. 31(4), pages 614-620, December.
    • Handle: RePEc:eee:jmacro:v:31:y:2009:i:4:p:614-620
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    2. Kitaura, Koji & Ogawa, Hikaru & Yakita, Sayaka, 2011. "Multiple equilibria arising from donor’s aid policy in economic development," Journal of Macroeconomics, Elsevier, vol. 33(4), pages 819-827.
    3. Doytch, Nadia & Thelen, Nina & Mendoza, Ronald U., 2014. "The impact of FDI on child labor: Insights from an empirical analysis of sectoral FDI data and case studies," Children and Youth Services Review, Elsevier, vol. 47(P2), pages 157-167.

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