Cash transfers to families reduces child labour

Transfers of money to poor families in Ecuador postponed children’s entry into the labour force, found research published in the American Economic Journal, ‘Poverty alleviation and child labor’. Eric Edmonds (Dartmouth College) and Norbert Schady (Inter-American Development Bank) made a random selection from poor women with children in Ecuador for a cash transfer equivalent to 7 per cent of monthly expenditures. The transfer is greater than the increase in schooling costs at the end of primary school, but it is less than 20 per cent of median child labour earnings in the labour market. Poor families with children in school at the time of the award used the extra income to postpone the child’s entry into the labour force.

The article can be read in full at the Dartmouth College website.