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Journal Articles Journal of Macroeconomics Year : 2015

Child Labor, idiosyncratic shocks, and social policy

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Abstract

In this paper, we provide a dynamic model with heterogeneous agents to study child labor in an economy with idiosyncratic shocks to employment. Households facing adverse shocks may use child labor as a means to smooth consumption. We show that the introduction of an unemployment insurance program and/or a universal basic income system helps eliminate child labor endogenously in this context. A calibration to South Africa in the 1990s is provided.

Dates and versions

hal-01456112 , version 1 (03-02-2017)

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Alice Fabre, Stéphane Pallage. Child Labor, idiosyncratic shocks, and social policy. Journal of Macroeconomics, 2015, 45, pp.394-411. ⟨10.1016/j.jmacro.2015.07.001⟩. ⟨hal-01456112⟩
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