The impact of child labor on schooling outcomes in Nicaragua

Child labor is considered a key obstacle to reaching the international commitments of Education For All. However, the empirical evidence on the effects of child labor on educational attainments is mostly limited to static measurements. This paper assesses the consequences of child labor on schooling outcomes over time by employing a three-year longitudinal household data set from Nicaragua. The potential endogeneity of past child labor and school outcomes is addressed through instrumental variables. The time a child dedicates to work is found to have harmful consequences on subsequent educational achievements, even after controlling for previous human capital accumulation and other factors. In particular, working over three hours a day is associated with school failure in the medium term. A distinction by type of work shows that time spent in market production has larger negative effects on school outcomes than time spent performing household chores.

► Causal effects of child labor on schooling outcomes assessed with a three-year longitudinal household data set from Nicaragua. ► An increase of one standard deviation over the mean daily hours of work in 1998 is associated with a reduction of 27% on a child's maximum education attainment, and with an additional delay in school progress of 9%. ► A standard deviation increase in child labor in 1998 leads to a reduction in the probability of completing primary school of over 20 percentage points. ► Working over three hours a day is associated with the largest deterioration on a child's school progress. ► Time spent in market production activities in 1998 appears to be more damaging than time devoted to household chores.