CHILD LABOR AND THE INVERTED-U CURVE: EVIDENCE FROM BRAZIL

Abstract

This article studies the effect of family wealth on the utilization of child labor in rural Brazil. Regarding methodology, the censored quantile instrumental variable (CQIV) was used to capture heterogeneity across the distribution of hours worked by children, also it deals with the problems of censorship and endogeneity. This paper found evidences of a negative relation between wealth, measured by land size, and child labor only for children in the lower quantiles of the distribution. On the other hand, at the median and upper quantiles this research found a non-linear relationship, supporting the hypothesis of “U invertido”. And the turning point is bigger at the upper quantile, where families have lower level of altruism. The results indicate that the preferences of the parents are the primary determinant of child labor.