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Child Labor and Schooling Decisions among Self-Help Group Members in Rural India

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  • Jean-Marie Baland
  • Timothée Demont
  • Rohini Somanathan

Abstract

This paper investigates the impact of informal microfinance groups (self-help groups, or SHGs) on children’s education and work in rural India. In 2002, 24 eligible villages were randomly selected for opening SHGs, and 12 others were randomly selected as a control group. Households were surveyed three times over a 5-year period, allowing for the study of medium-term outcomes. We find a robust and strong increase in secondary school enrollment rates over time, with intention-to-treat estimates of about 40%. This effect stems from a quicker grade progression, leading to lower dropout rates between primary and secondary school. Contrary to usual presumptions, we find no decrease in overall child labor (but a reorientation toward part-time domestic work) and no direct role of credit. By contrast, we show that social interactions within SHGs are very important.

Suggested Citation

  • Jean-Marie Baland & Timothée Demont & Rohini Somanathan, 2020. "Child Labor and Schooling Decisions among Self-Help Group Members in Rural India," Economic Development and Cultural Change, University of Chicago Press, vol. 69(1), pages 73-105.
    • Handle: RePEc:ucp:ecdecc:doi:10.1086/703046
    DOI: 10.1086/703046
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    Cited by:

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    3. Danish Ahmad & Itismita Mohanty & Laili Irani & Dileep Mavalankar & Theo Niyonsenga, 2020. "Participation in microfinance based Self Help Groups in India: Who becomes a member and for how long?," PLOS ONE, Public Library of Science, vol. 15(8), pages 1-26, August.

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    More about this item

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis

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