SMERU Publication

Working Paper
Topic: Education, Gender Analysis, Health, Labor & Industrial Relations, Poverty, Vulnerability, & Inequality, Social Protection

Download Report (English, 794 KB, PDF)

The Consequences of Child Market Work on the Growth of Human Capital

Armand A. Sim

Daniel Suryadarma
(Australian National University)

Asep Suryahadi

Editor
Stephen Girschik

ABSTRACT

Child labor is a phenomenon that has attracted a great amount of attention and research. Theoretical propositions suggest that child labor is inefficient if it adversely affects future potential earning ability. This paper contributes to the literature on the effects of child market work on human capital by focusing on the long-term growth in human capital, which is widely known to significantly affect earning ability. The paper also uses better measures of human capital by focusing on the output of the human capital production function: numeracy skills, cognitive skills, and pulmonary function. Using a rich longitudinal dataset on Indonesia, we find strong negative effects of child labor on the growth of both numeracy and cognitive skills in the next seven years. In addition, we find a strong and negative effect on pulmonary function as measured through lung capacity. Comparing the effects by gender and type of work, we find that female child workers suffer from more adverse effects on their mathematical skills growth, while male child workers experience a much smaller growth in their pulmonary function. We also find that child workers who work for a wage outside the family bear worse effects compared to child workers who work in the family business.

Keywords: child labor, human capital, skills, health, Indonesia
JEL Classifications: I12, I21, J13, J22, O15

TABLES OF CONTENTS

ABSTRACT
TABLES OF CONTENTS
LIST OF TABLES
LIST OF FIGURES
I. INTRODUCTION
II. DATA
III. CHILD MARKET WORK IN INDONESIA
IV. ESTIMATION STRATEGY

4.1 Summary Statistics

V. ESTIMATION RESULTS
VI. GENDER HETEROGENEITY
VII. TYPE OF WORK HETEROGENEITY
VIII. WORKING INTENSITY
IX. CONCLUSION
LIST OF REFERENCES
APPENDICES