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The power of Remittances on the Prevalence of Child Labor
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The power of Remittances on the Prevalence of Child Labor

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  • Christian EBEKE

Abstract

This article examines the relationship between migrants' remittances and the prevalence of child labor by using a large sample of developing countries. In particular, we investigate whether the inflows of remittances help to offset the effects of financial constraints and income shocks on the prevalence of child labor. Starting from a simple theoretical model, then based on a sample of 82 developing countries (of which 31 are African) observed in the year 2000 and after taking into account the endogeneity of remittances, migration and financial development, we show that remittances reduce significantly the prevalence of child labor in developing countries characterized by weak financial systems and by strong income instability. However, we have not found a statistically significant relationship between adults’ emigration and child labor at home. Policy recommendations for specific strategies to facilitate receipt of remittances by households are more than ever appropriate for a region like Sub-Saharan Africa, which currently receives a small fraction of these funds compared to other developing countries, and where the prevalence of child labor is still a serious issue.

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  • Christian EBEKE, 2009. "The power of Remittances on the Prevalence of Child Labor," Working Papers 200924, CERDI.
    • Handle: RePEc:cdi:wpaper:1111
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    2. Bernal, Carolina & Vlaicu, Razvan, 2023. "Child Labor, Rainfall Shocks, and Financial Inclusion: Evidence from Rural Households," IDB Publications (Working Papers) 13008, Inter-American Development Bank.
    3. Yumna Hasan & Waqar Wadho, 2020. "Unskilled Migration, Child labor and Human Capital Accumulation of Children in the Presence of Parental Absenteeism," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 25(2), pages 119-138, July-Dec.
    4. Ralitza Dimova & Gil S. Epstein & Ira N. Gang, 2015. "Migration, Transfers and Child Labor," Review of Development Economics, Wiley Blackwell, vol. 19(3), pages 735-747, August.
    5. Aïssata COULIBALY, 2016. "Revisiting the Relationship between Financial Development and Child Labor in Developing Countries: Do Inequality and Institutions Matter?," Working Papers 201619, CERDI.
    6. Idris Isyaku Abdullahi & Zaleha Mohd Noor & Rusmawati Said & Ahmad Zubaidi Baharumshah, 2016. "Does Poverty Influence Prevalence of Child Labor in Developing Countries?," International Journal of Economics and Financial Issues, Econjournals, vol. 6(1), pages 7-12.
    7. Moussé Sow & Mr. Ivohasina F Razafimahefa, 2015. "Fiscal Decentralization and the Efficiency of Public Service Delivery," IMF Working Papers 2015/059, International Monetary Fund.

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    More about this item

    Keywords

    Remittances; Financial Development; Income variability; Child Labor; LDCs; Instrumental variables;
    All these keywords.

    JEL classification:

    • J81 - Labor and Demographic Economics - - Labor Standards - - - Working Conditions
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances

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