Effect of ethnic diversity on child labor: Empirical evidence from Ghana

One of the persistent global problems today is child labor with the current estimates indicating that 160 million children were in child labor as at the beginning of 2020. To reduce child labor, it is important to unearth the factors that influence it for policy implementation. We contribute to the literature and policy by examining the impact of ethnic diversity on child labor, while considering the mediating effects of informal work and household poverty. Using ethnic fractionalization and polarization indexes, we find that a unit increase in ethnic diversity is associated with an increase in child labor. Gender‐wise, we find the effect to be bigger for male child workers. Based on location, we find that the effect is pronounced for working children living in rural areas. Also, our mediation analysis shows that informal work, and household poverty are the pathways through which ethnic diversity increases child labor.