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Essays on the economics of child labour and child\ud education

By Markus Ulrich Sauder


This thesis focuses on the economics of child labour and child education within developing\ud and developed countries.\ud The first part of the thesis examines child labour and child education in developing countries.\ud It investigates the motivations of parents to send their children to work and analyses\ud the so-called commitment problem of child labour in a dynamic, overlapping generations game\ud theoretical model. As a novelty, this model relaxes the requirement of an observable history\ud of play and models the decision problem as an overlapping generations cyclic game. We show\ud that first-best contracts may me implemented, implying optimal child education and low child\ud labour, if a bequest sanction can be imposed by grandparents. We also discuss the special role\ud that grandparents have within this model.\ud The second part of the thesis analyses the economics of child education within a developed\ud country context: the transmission of education across generations and the impact of a schooling\ud reform on educational choice and later outcomes. In a first chapter of this second part, we\ud examine specifically the influence of grandparents, as postulated by the model in part one, on\ud the education of grandchildren. A unique dataset on three generations, the National Child\ud Development Survey of the UK, is used. As a special feature, we apply recent econometric\ud techniques to deal with censoring in a semi-parametric setting. The results indicate that it is\ud not education but rather unobservable factors on the parent and grandparent level that affect\ud the educational choice of grandchildren. These unobservable factors may be interpreted as\ud innate ability or parenting skills. In a second chapter within this part, a schooling reform,\ud the introduction of comprehensive schools in the UK and its impact on educational and labour\ud market outcomes is evaluated. We find, using data from the National Child Development Survey\ud and applying a new, quasi-differenced matching estimator, that bias corrected estimates of the\ud reform suggest no effect on the means, but a sizeable effect on the variance of outcomes. We\ud interpret this finding as indicative of a higher risk inherent to the selective education system.\ud In summary the thesis sheds some new light on the economics of education and child\ud labour, both in a theoretical and an empirical context, and provides a valuable reference and\ud starting point for future research in this area

Topics: HB, HD
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