Is There a Child Labor Trap? Inter-Generational Persistence of Child Labor in Brazil

This paper examines inter-generational persistence in child labor by developing a dynamic model and exploring its implications empirically in Brazil. We begin by building a simple overlapping generations model of the household child labor decision. We assume that this decision is made by the head of the household, where parents decide to send their child to work only if by doing so the child�s contribution to the present consumption of the family outweighs the future consumption benefit the family would enjoy from keeping the child in school. The main predictions of the model are that children are more likely to work when they come from households with parents who were child laborers, from households with parents who have lower educational attainment and that child labor has adverse effects on children�s educational attainment and their adult earnings. Evidence of persistence in child labor is found by examining household survey data from Brazil. We exploit the fact that the survey data includes information on child labor of both parents and children in a household, as well as information on the educational achievement of the grandparents. We find that children are more likely to be child laborers the younger their parents were when they entered the labor force and the lower the educational attainment of the parents and of the grandparents. Another important finding is that individuals who start work at a younger age tend to end up with lower earnings as adults suggesting that the vocational training aspect of child labor does not the negative effect from loss of schooling.