Idle child: the household's buffer

Type Working Paper
Title Idle child: the household's buffer
Publication (Day/Month/Year) 2006
There is substantial evidence in recent labor economics literature that there are significant amount of children in the developing economies who neither go to school nor go to work. The literature coins them as the “idle children”. In this paper, we develop a model to explain the presence of idle children based on the labor market imperfections. The model predicts in presence high uncertainty created by the labor market, given costly schooling, a household may prefer to hold a reserve army of ‘idle children’ as a buffer to meet its own labor requirements. Using data from the World Bank’s Survey of Living Conditions in two North Indian States namely, Uttar Pradesh and Bihar, we show that in the presence of high cost of schooling and labor market uncertainty, the child may resort to idleness.

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