Despite economic prosperity and dramatic fall in poverty levels, unequal access to education ensures hundreds of millions of children remain trapped in child labour in developing countries including India, says a new study by Indian-origin researchers.
For the study, Jayanta Sarkar and Dipanwita Sarkar from Queensland University of Technology Business School in Australia compared levels of child labour and schooling across economic groups in India, Peru and Ethiopia.
They developed an innovative overlapping generations economic model to explain how child labour stubbornly persists despite falling poverty in developing countries.
The "fixed private cost" of schooling meant the poor had less access to education relative to the rich, a key driver in child labour among the poor, Sarkar said.
"Typically schooling, even in a ‘free’ education system, imposes a large burden on the poor through the fixed costs of things like transportation to and from school and books and other materials," he pointed out.
The research found that income inequality may matter more than poverty in explaining why child labour continues.
"The analysis shows that families below a level of relative income choose zero schooling and full time labour for their children because they simply can’t afford either the fixed schooling costs, or to miss out on the small income their children generate for the household,” Sarkar noted.
"Instead of schooling, they invest in child health to ensure children possess physical capability to perform unskilled work,” he said.
Figures from The World Bank show the number of people living on less than $1.25 per day decreased dramatically from half the citizens in the developing world in 1981 to 21 percent in 2010, despite a 59 percent increase in the developing world population.
However UNICEF estimates 246 million children are still engaged in child labour.
"There is a clear link between income inequality and intensity of child labour. But, more income does not always reduce child labour. In fact, as wages rise child labour rises in families who find schooling too expensive,” Sarkar said.
"Only after income reaches a certain ‘threshold’ level, does schooling become affordable and child labour start to fall. The ‘threshold’ rises with the degree of income inequality,” he said.
Sarkar said that simply banning child labour would actually end up hurting the poor as child income would dry up and as a result private investment in health would fall. He said a child labour ban had to be accompanied by an increase in access to education.
"Two policies that could help eliminate child labour are targeted attempts to reduce schooling costs for the poor, and raising the efficacy of public health infrastructure," Sarkar noted.
The study was published in the journal Economic Inquiry.