Child Labor and Education in Latin America Child Labor and Education in Latin America An Economic Perspective Edited by Peter F. Orazem, Guilherme Sedlacek, and Zafiris Tzannatos CHILD LABOR AND EDUCATION IN LATIN AMERICA: AN ECONOMIC PERSPECTIVE Copyright © Peter F. Orazem, Guilherme Sedlacek, and Zafiris Tzannatos, 2009. Softcover reprint of the hardcover 1st edition 2009 978-0-230-61459-8 All rights reserved. First published in 2009 by PALGRAVE MACMILLAN® in the United States—a division of St. Martin’s Press LLC, 175 Fifth Avenue, New York, NY 10010. Where this book is distributed in the UK, Europe and the rest of the world, this is by Palgrave Macmillan, a division of Macmillan Publishers Limited, registered in England, company number 785998, of Houndmills, Basingstoke, Hampshire RG21 6XS. Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world. Palgrave® and Macmillan® are registered trademarks in the United States, the United Kingdom, Europe and other countries. ISBN 978-1-349-37846-3 ISBN 978-0-230-62010-0 (eBook) DOI 10.1057/9780230620100 Library of Congress Cataloging-in-Publication Data Child labor and education in Latin America : an economic perspective / [edited by] Peter F. Orazem, Guilherme Sedlacek, Zafiris Tzannatos. p. cm. Includes bibliographical references. 1. Child labor—Latin America. 2. Education—Latin America. 3. School enrollment—Latin America. I. Orazem, Peter F. II. Sedlacek, Guilherme Luís, 1949– III. Tzannatos, Zafiris, 1953– HD6250.L292C45 2009 331.391098—dc22 2008034379 A catalogue record of the book is available from the British Library. Design by Newgen Imaging Systems (P) Ltd., Chennai, India. First edition: April 2009 10 9 8 7 6 5 4 3 2 1 To our parents who taught us the importance of hard work, a good education, and a supportive family Frank and Slava Orazem, in memoriam Guilherme and Ilka Sedlacek Evangelinos and Maria Tzannatos And to Matthew, Katie, Savitri, Gino, Antonia, and Mariam: may you live in a world free from the abusive forms of child labor, Your Dads Contents List of Figures ix List of Tables xi Abstract xv Preface xvii Acronyms xix Part I: Introduction Introduction: Child Labor and Education in Latin America 3 Peter F. Orazem, Guilherme Sedlacek, and Zafiris Tzannatos Part II: Background 1. C hanging Patterns of Child Labor around the World since 1950: The Roles of Income Growth, Parental Literacy, and Agriculture 21 Victoria Gunnarsson, Peter F. Orazem, and Guilherme Sedlacek 2. Child Labor, Schooling, and Poverty in Latin America 33 Guilherme Sedlacek, Suzanne Duryea, Nadeem Ilahi, and Masaru Sasaki Part III: Behavioral Inferences 3. The Responses of Child Labor, School Enrollment, and Grade Repetition to the Loss of Parental Earnings in Brazil, 1982–1999 55 Marcelo Côrtes Neri, Emily Gustafsson-Wright, Guilherme Sedlacek, and Peter F. Orazem 4. D ynamics of Child Labor: Labor-Force Entry and Exit in Urban Brazil 69 Jasper Hoek, Suzanne Duryea, David Lam, and Deborah Levison 5. H ow Does Working as a Child Affect Wages, Income, and Poverty as an Adult? 87 Nadeem Ilahi, Peter F. Orazem, and Guilherme Sedlacek viii Contents 6. The Intergenerational Persistence of Child Labor 103 Patrick M. Emerson and André Portela F. de Souza 7. The Impact of Child Labor Intensity on Mathematics and Language Skills in Latin America 117 Mario A. Sánchez, Peter F. Orazem, and Victoria Gunnarsson Part IV: Policy Evaluations 8. The Impact of Cash Transfers on Child Labor and School Enrollment in Brazil 133 Eliana Cardoso and André Portela F. de Souza 9. Limiting Child Labor through Behavior-based Income Transfers: An Experimental Evaluation of the PETI Program in Rural Brazil 147 Yoon-Tien Yap, Guilherme Sedlacek, and Peter F. Orazem 10. The Impact of PROGRESA on Child Labor and Schooling 167 Emmanuel Skoufias and Susan W. Parker 11. Education and Child Labor: Experimental Evidence from a Nicaraguan Conditional Cash Transfer Program 187 John A. Maluccio Part V: Conclusions 12. P olicy Options to Eradicate Child Labor and Promote Education in Latin America 207 Zafiris Tzannatos, Peter F. Orazem, and Guilherme Sedlacek Bibliography 219 List of Contributors 227 Figures 1.1a Real Per Capita GDP and Child Labor, 1960 22 1.1b R eal Per Capita GDP and Child Labor, 2000 23 2.1 Employment and Attendance Rates for Children Ages 10–14 34 2.2 Average Enrollment Rates in 18 Latin American Countries, by Household Income Level and Age, 1999 36 2.3 Average Years of Completed Schooling for 16- to 18-Year-Olds in Latin America, by Country 48 3.1 Stages of Investment in School 57 3.2 The Impact of Adverse Income Shocks or Child Wage Increases on Investment in School 58 4.1 Proportion of 14-Year-Old and 16-Year-Old Males and Females Employed, 6 Metropolitan Areas, 1982–99, Brazil, Three-Month Moving Averages 74 4.2 Proportion of 14-Year-Olds Employed, by Education of Mother, 6 Metropolitan Areas, 1982–99, Three-Month Moving Averages, Brazil PME 76 4.3 Rates of Entry into and Exit from Employment, 14-Year-Old Boys and Girls, 6 Metropolitan Areas, 1982–99, Three-Month Moving Averages, Brazil PME 78 4.4 R ates of Entry into and Exit from Employment, 14-Year-Old Boys, by Mother’s Education, 6 Metropolitan Areas, 1982–99, Three-Month Moving Averages, Brazil PME 79 4.5 R ates of Entry into and Exit from Employment in Salvador, São Paulo, and Porto Alegre, 14-Year-Old Boys, 1982–99, Yearly Averages, Brazil PME 81 5.1 Cumulative Distribution of Age at Workforce Entry in Brazil, by 1996 Age Cohort 89 5.2 Educational Attainment by Age-at-Entry in the Workforce in Brazil, by Cohorts 89 6.1 Child Human Capital as a Function of Parental Human Capital 105 6.2 The Increased Probability that a 12-Year-Old Child Works Attributed to His/Her Parents Having Been Child Laborers 110 x Figures 9.1 P artitioning the Sample into Eligible Treated, Eligible Untreated, and Controls 153 10.1 The Effect of Conditional Cash Transfers on Children’s School Attendance and Work 170 11.1a RPS Average Impact on Enrollment for 7- to 13-Year-Olds Who Have Not Completed Fourth Grade, by Age 194 11.1b RPS Average Impact on Enrollment for 7- to 13-Year-Olds Who Have Not Completed Fourth Grade, by Expenditure Group and by Gender 195 11.2a RPS Average Impact on Attendance for 7- to 13-Year-Olds Who Have Not Completed Fourth Grade, by Age 196 11.2b RPS Average Impact on Attendance for 7- to 13-Year-Olds Who Have Not Completed Fourth Grade, by Expenditure Group and by Gender 196 11.3a RPS Average Impact on Work for 7- to 13-Year-Olds Who Have Not Completed Fourth Grade, by Age 197 11.3b RPS Average Impact on Work for 7- to 13-Year-Olds Who Have Not Completed Fourth Grade, by Expenditure Group and Gender 197 11.4a Schooling and Work for 7- to 13-Year-Olds, RPS Baseline Intervention Areas Only 202 11.4b Schooling and Work for 7- to 13-Year-Olds, RPS Follow-up Intervention Areas Only 202 Tables 1.1 Percent Child Labor Participation by Continent, 1950–2000 25 1.2 Population Weighted Per Capita GDP, Agricultural Share of GDP, and Illiteracy, by Year and Continent 26 1.3 Regression Analysis of Child Labor-Force Participation Rates by Country, 1950–2000 28 2.1 Employment Rates for Children Aged 10 to 14 by Country, Urban or Rural Residence, and Gender 38 2.2 Employment and Enrollment Rates for Children Aged 10 to 14 by Country and Labor-Market Status 38 2.3 Distribution of Daily Hours Worked by Children Aged 10 to 14 by Country and Gender 39 2.4 Percentage of Children Aged 10 to 14 Lagging Behind Expected Grade Level by Country, Gender, and Labor-Market Status 39 2.5 Econometric Determinants of Child Labor, by Country 42 2.6 Econometric Determinants of Current Enrollment, by Country 44 2.7 Econometric Determinants of Falling Behind in School, by Country 46 2.8 Effect of Child Work on School Outcomes for Children Aged 10–16 from 17 Countries in Latin America 49 3.1 Static Indicators of School Performance and Child Labor (Children between 10 and 15 Years of Age) 62 3.2 Dynamic Indicators of School Performance and Child Labor (Children between 10 and 15 Years of Age) 62 3.3 Logistic Estimation of the Probability a Child Leaves School 63 3.4 L ogistic Estimation of the Probability a Child Enters the Labor Market 65 3.5 Logistic Estimation of the Probability a Child Fails to Advance to the Next Grade 67 4.1 Employment Rates and Employment Transition Rates for 10–12-, 13–14-, and 15–16-Year-Old Boys and Girls, 6 Metropolitan Areas, 1982–84 and 1996–98, Brazil PME 72