The World Bank Economic Review Advance Access originally published online on March 2, 2006
The World Bank Economic Review 2006 20(1):31-54; doi:10.1093/wber/lhj003
Child Labor and School Achievement in Latin America
Victoria Gunnarsson is a research officer in the Fiscal Affairs Department at the International Monetary Fund; her email address is vgunnarsson{at}imf.org.
Peter F. Orazem is a professor at Iowa State University; his email address is pfo{at}iastate.edu.
Mario A. Sánchez is a social development specialist at the Inter-American Development Bank; his e-mail address is mariosan{at}iadb.org.
Child labor’s effect on academic achievement is estimated using unique data on third and fourth graders in nine Latin-American countries. Cross-country variation in truancy regulations provides an exogenous shift in the ages of children normally in these grades, providing exogenous variation in the opportunity cost of children’s time. Least squares estimates suggest that child labor lowers test scores, but those estimates are biased toward zero. Corrected estimates are still negative and statistically significant. Children working 1 standard deviation above the mean have average scores that are 16 percent lower on mathematics examinations and 11 percent lower on language examinations, consistent with the estimates of the adverse impact of child labor on returns to schooling.