The incidence of child labour in the World today is very high, particularly in Third World countries and an extensive literature exists on the causes of this phenomenon. However there has been little investigation into the consequences of child labour on socioeconomic outcomes of which the educational attainment of the children is one. Using cross-section data for 12 year old children in Vietnam, collected by the Young Lives team, this paper uses firstly OLS regressions and then an instrumental variable strategy to evaluate the impact of child labour on the test scores of the sampled 12-year-olds in the Peabody Picture Vocabulary Test which is used as a measure of their educational attainment. A child labour variable is created by combining the total number of hours in a typical day that the child spends caring for others, doing domestic tasks, working for the family farm or business and working for pay outside of the household. Child labour does not have a significant impact on the test score results of the children when village level fixed effects are included, and when child labour is instrumented for using exogenous shocks to the household. The evidence suggests that the short-term impact of child labour may be negligible although this only holds for the relatively low levels of child labour undertaken by the Vietnamese children. Reducing child labour will require households to be very forward-looking and to have access to sufficient credit to fund the costs of schooling without requiring their children work.
Paper submitted in part fulfilment of the requirements for the degree of MSc in Economics for Development at the University of Oxford.
Watson, A. The Impact of Child Labour on the Educational Achievement of Children in Vietnam. (2008) 30 pp. [MSc Thesis, University of Oxford]