| This thesis explores the link between education and child labor in Latin America using cross-sectional analysis, recent methodological advances and simple theoretical tools. First, it proposes a methodology to estimate the economic cost for a child to be working. Child labor and schooling are not necessarily incompatible and child labor is not the only reason why children drop out of school. As a result, measuring the economic cost of child labor as the cost of not attending school results in an overestimation. In this dissertation, the real substitution effect between school and work is estimated to adjust downward the cost of school drop-out in order to estimate the economic cost of child labor. The methodology is applied to the case of Paraguay.; Second, this dissertation investigates whether "Ninos de Solidaridad", a demand-side program in Mexico, has an impact on school attendance, child labor and inequality. Demand-side programs are expected to have an impact to the extent that the lack of income is among the factors causing school drop-out. However, evaluating such programs requires using appropriate techniques. This thesis shows that matching estimates are biased when the outcome is a binary variable and a condition for program participation. In the case of "Ninos de Solidaridad", the thesis shows that one must rely on locality level estimates to provide an unbiased estimate for the impact on school attendance.; Third the dissertation presents a theoretical model for the optimal allocation of a child's time between schooling and labor, given the possibility of benefiting from publicly funded demand-side schooling interventions. The poorest families may not be able to send their children to school, even in the presence of the program, because the marginal utility of the children's income is just too high as compared to the stipends, which tend to be of low value because of budget constraints. The model shows that a program with a proportional stipend would reach a higher proportion of the poor than a program with a fixed stipend conditional on school attendance but that both types of program may exclude the poorest families. |
