14th journées Louis-André Gérard-Varet

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Does Child Labor Hurt Parents? Evidence from Mexico
Delphine Boutin, Olivier Bargain

Last modified: 2015-03-17

Abstract


The impact of child labor on parentswelfare is basically unknown. Theories viewchild labor as a bad (the underying assumption in the "luxury axiom") or, at theother extreme, as a form of values transmission and human capital accumulation(leading to the "wealth paradox"). We suggest an original and direct test of par-entsperception about child labor by estimating the e¤ect of child work on parentsemotional well-being. On a sample of Mexican couples with children, we nd thatchild labor hurts parents, yet not systematically women more than men. The psy-chological cost of having at least one child at work is equivalent to a 22% drop inhousehold income, which roughly coincides with average child earnings. Combiningsubjective well-being with information on actual choice, we can estimate preferencebounds. We conclude about the very high heterogeneity across households, withsome parents deeply a¤ected while others bear no costs (agricultural householdsor households in regions where norms make child labor acceptable). The di¤erenttheories of child labor therefore coexist in the same country, but simply apply to dif-ferent segments of the society. Using variation in intrahousehold decision power, wealso nd substantial heterogeneity across individual preferences within households.

Keywords


subjective well-being, child labor, altruism, power, norms.