A dynamic analysis of the effects of child labor on educational attainments in Nicaragua

Child labor is considered a key obstacle to reaching the international commitments of Education For All and the Millennium Development Goals. However, economic theory does not predict unambiguously that children's work displaces schooling, and the empirical evidence on the effects of child labor on educational attainments is mostly limited to static measurements. This dissertation assesses the consequences of child labor on schooling outcomes over time and the policies that might be more effective in facilitating human capital accumulation while reducing child labor, by employing a three-year longitudinal household data set from Nicaragua.; A first multivariate empirical analysis identifies the mechanisms by which children allocate their time between work and schooling activities, with particular emphasis on factors that may be altered by public policies. The second empirical analysis assesses the effects of children's daily hours of work on a number of educational attainments three years later, addressing the potential endogeneity of past child labor and school outcomes. Finally, the study explores the impact of policies affecting the economic environment of households to reduce child labor supply and thereby improve school achievements.; The time a child dedicates to work is found to have harmful consequences on subsequent educational achievements, even after controlling for previous human capital accumulation and other factors. In particular, the study finds that working over three hours a day is associated with school failure in the medium term. A distinction by type of work shows that time spent in market production has larger negative effects on school outcomes than time spent performing household chores.; Simulations of five types of policies reveal that alleviating households of the financial burden of sending children to school, such as eliminating school fees, as well as altering the value of children's time in favor of human capital accumulation, such as investing in schools or electricity infrastructure, could be effective strategies for reducing child labor incidence and improving school attainments. The findings also suggest that a child labor policy could be more effective if it were designed with a cross-sector approach, and if it targeted poor and rural populations.