Why do Education Expenditures Fail to Reduce Child Labor? Looking for an Optimal Composition of the Social Expenditures

Abstract

In a framework, where child labor results from a risky choice between working and schooling, we study the reason why public education expenditures may fail to reduce child labor. We determine an optimal composition of social expenditures between education and health which minimizes child labor for a given government's budget. This is tested with panel data over 81 developing countries. It is evidenced that the unbalanced structure of the social spending favourable to education to the detriment of health often observed in the poor countries is inefficient to reduce child labor. More generally, our statements shed light on the need to reconsider the conventional wisdom viewing public health and education expenditures as substitutes.Child Labor, Education Expenditures, Health Expenditures