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CHILD LABOR AND THE EDUCATION OF A SOCIETY

Published online by Cambridge University Press:  01 April 2009

Clive Bell  and
Hans Gersbach
Clive Bell
Affiliation:
Südasien-Institut der Universität Heidelberg
Hans Gersbach*
Affiliation:
Eidgenössische Technische Hochschule Zürich
*
Address correspondence to: Hans Gersbach, CER-ETH—Center of Economic Research at ETH Zurich and CEPR, ETH Zurich, Zürichbergstrasse 18, 8092 Zurich, Switzerland; e-mail: [email protected].
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Abstract

This paper analyzes policies by means of which a whole society in an initial state of illiteracy and low productivity can raise itself into a condition of continuous growth. Using an overlapping generations model in which human capital is formed through child rearing and formal education, we show that an escape from a poverty trap, in which children work full time and no human capital accumulation takes place, is possible through compulsory education or programs of taxes and transfers. If school attendance is unenforceable, temporary inequality is unavoidable if the society is to escape in finite time, but long-run inequalities are avoidable provided sufficiently heavy, but temporary, taxes can be imposed on the better off. Programs that aim simply at high attendance rates in the present can be strongly nonoptimal.

Keywords

Dynamic Redistribution PoliciesPoverty TrapHuman Capital FormationTemporary InequalityAttendance Rates
Type
Articles
Information
Macroeconomic Dynamics , Volume 13 , Issue 2 , April 2009 , pp. 220 - 249
Copyright
Copyright © Cambridge University Press 2009

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