Child labor, child schooling, and their interaction with adult labor : empirical evidence for Peru and Pakistan

Using data from Peru and Pakistan, this article tests two hypotheses: there is a positive association between hours of child labor and poverty, and there is a negative association between child schooling and poverty. Both of these hypotheses are confirmed by the Pakistani data, but not by the Peruvian data. The reduction in poverty rates due to income from children's labor is greater in Pakistan than in Peru. The nature of interaction between adult and child labor markets varies with the gender of the child and the adult. In Peru rising men's wages significantly reduce the labor hours of girls, whereas in Pakistan there is a strong complementarity between women's and girls' labor markets. Both data sets agree on the positive role that increasing adult education can play in improving child welfare.