Child Labour and Schooling Responses to Production and Health Shocks

This paper investigates the effect of shocks on children’s time in school, home production and market production at the extensive and intensive margins. Production shocks increase the probability of withdrawal from school by 11 % and participation in farm work by 24%, but have no effects on chil-dren’s intensive margin. Health shocks to men and women increase children’s hours worked in household enterprises and child care, respectively. These results suggest that households adjust child labour in response to unexpected events at the extensive or the intensive margin, depending on task. This task-specific data provide evidence that children are complementary to adult labour in agriculture, but substitutes to adult labour in child care. JEL classification: I25, J13, J22, O1