Opportunity, Inequality and the Intergenerational Transmission of Child Labour.

This paper presents a model in which opportunity differences within society result in child labour, where ‘opportunity’ is broadly defined but can include school quality, access to higher paying jobs, access to information about the returns to education and actual discrimination. If opportunity differences exist, child labour and poverty are shown to be symptomatic of this underlying socioeconomic condition. It is then shown that policies that ban child labour and/or introduce compulsory education laws can actually reduce dynastic welfare, increase poverty and further exacerbate income inequality within society, because they treat the symptom rather than the disease: the lack of opportunity. [ABSTRACT FROM AUTHOR]