DOES LAND REFORM IN TRANSITION COUNTRIES INCREASE CHILD LABOR? EVIDENCE FROM THE REPUBLIC OF GEORGIA

Abstract

This paper investigates the issue of child labor in the context of land reforms in transition economies, using farm household data from the Republic of Georgia. The results show that an increase in landholdings as an outcome of the land reform can, in the presence of market imperfections, lead to an increase in child labor. This is because the increased demand for labor on the family farm is stronger than the wealth effect generated by the land reform. However, this result is not uniform across farm families. First, it is only relevant for boys, because girls tend to assist in household activities rather than in farm work. Second, larger households are able to meet the increased demand for farm labor without the need for additional child labor. To the extent that smaller households tend to be poorer, it is mostly the poor households that sacrifice the future wellbeing of their male children in order to satisfy current needs. In this sense, the land reform may lead to a higher rural inequality in the long run. The policy implications are that land reforms in transition countries should include, as an integral ingredient, the development of rural land, labor and credit markets, in order to avoid the repercussions associated with increased child labor.Labor and Human Capital, Land Economics/Use,