Children's Working Hours, School Enrolment and Human Capital Accumulation: Evidence from Pakistan and Nicaragua

We analyse the determinants of school attendance and hours worked by children in Pakistan and Nicaragua. On the basis of a theoretical model of children's labour supply, we simultaneously estimate the school attendance decision and the hours worked by Full Model Maximum Likelihood. We analyse the marginal effects of explanatory variables conditioning on the "latent" status of children in terms of schooling and work. We show that these effects are rather different, and discuss the policy implication of this finding. Finally, we use our predicted hours of work to analyse the effects of work on children's school achievements.