Abstract:
This paper has two objectives. First, we construct a theoretical model which explains the
empirical evidence that in developing countries, first-born children are more likely to be child
laborers than later-born. Second, we explore the long-run consequences of child labor regulations
within our framework. In our model, credit-constrained parents use the labor income from their
first-born child to fund the schooling of later-born children. In the presence of such intra-sibling
effects, child labor laws which decrease work opportunities for children may backfire, increasing
child labor and reducing human capital in the long run.
