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How does credit access affect children's time allocation? Evidence from rural India

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  • Fuwa, Nobuhiko
  • Ito, Seiro
  • Kubo, Kensuke
  • Kurosaki, Takashi
  • Sawada, Yasuyuki

Abstract

Using a unique dataset obtained from rural Andhra Pradesh, India that contains direct observations of household access to credit and detailed time use, results of this study indicate that credit market failures lead to a substantial reallocation of time used by children for activities such as schooling, household chores, remunerative work, and leisure. The negative effects of credit constraints on schooling amount to a 60% decrease of average schooling time. However, the magnitude of decrease due to credit constraints is about half that of the increase in both domestic and remunerative child labor, the other half appearing to come from a reduction in leisure.

Suggested Citation

  • Fuwa, Nobuhiko & Ito, Seiro & Kubo, Kensuke & Kurosaki, Takashi & Sawada, Yasuyuki, 2009. "How does credit access affect children's time allocation? Evidence from rural India," IDE Discussion Papers 183, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    • Handle: RePEc:jet:dpaper:dpaper183
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    Cited by:

    1. Tran Thi Thanh Tu & Nguyen Quoc Viet & Hoang Huu Loi, 2015. "Determinant of Access to Rural Credit and Its Effect on Living Standard: Case Study about Poor Households in Northwest, Vietnam," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 6(2), pages 218-230, April.
    2. Abid Hussain & Muhammad Jehangir Khan & Iftikhar Ahmad, 2016. "Impact of Credit on Education and Healthcare Spending in Rural Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 55(4), pages 853-870.
    3. Muhammad Jehangir Khan, 2019. "School Quality and Parental Schooling Decisions for Their Children: Public and Private Schools in Rural Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 58(2), pages 177-202.
    4. Alessandro Cigno, 2010. "How to Deal with Covert Child Labour, and Give Children an Effective Education, in a Poor Developing Country: An Optimal Taxation Problem with Moral Hazard," CESifo Working Paper Series 3077, CESifo.

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    More about this item

    Keywords

    Child labor; Schooling; Gender bias; Credit constraint; Household models; 児童労働; 学校教育; 性差別; 信用制約; 家計モデル;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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