Gunnarsson, Victoria; Orazem, Peter; Sanchez, Mario A.

World Bank Economic Review Vol. 20 no. 1 (January 2006): 31-54. (Originally published as WP #03023, August 2003)

Child laborﾒs effect on academic achievement is estimated, using unique data on 3rd and 4th graders in 9 Latin American countries. Cross-country variation in truancy regulations provides an exogenous shift in the ages of children normally in these grades, providing exogenous variation in opportunity cost of child time. Least-squares estimates of the impact of child labor on test scores are biased downward, but corrected estimates are still negative and statistically significant. Children working one standard deviation above the mean have average scores that are 16% lower on mathematics exams and 11% lower on language exams, consistent with estimates of the adverse impact of child labor on returns to schooling.

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