Question

how do children benefit more from education than from labouring for their family​

Answer 1

Answer:

Explanation:

If poor households send children to work because of cash  

constraints and credit market imperfections, increased  

income and risk insurance might be expected to weaken  

the link between poverty, child labour and educational  

deprivation. An increasing body of evidence from cash  

transfer programmes points in precisely this direction.

Parental decision-making on school attendance is the  

flip-side of decision-making on labour market entry. Simple  

economic models for understanding school participation  

and household investment in education assume that  

parents seek to maximise life-cycle utility for their children.  

The decision on whether or not to send children to school  

will be based on perceived costs and benefits. However,  

parents may underinvest relative to socially optimal levels  

for a number of reasons, including imperfect information  

on the benefits of education, poverty-related credit  

constraints, and differences between individual and socially  

optimal returns to education.  

Cash transfer programmes can affect child labour  

by changing the propensity to attend school. These  

programmes can increase returns to keeping children  

in school, reduce returns to child labour and enable  

households to smooth consumption in the face of  

exogenous shocks. By providing resources to the household  

they relieve poverty, lower risk and mitigate market  

imperfections limiting credit, thereby making it possible  

for households to afford more education (and forego more  

child labour). Programmes which condition payments on  

16 ODI Report

Child labour and education – a survey of slum settlements in Dhaka 17

school attendance create an incentive effect by increasing  

the immediate returns on children being in school and  

decreasing returns on child labour. Precise transmission  

effects will be determined by design factors, including  

the level and timing of transfers, and whether or not the  

transfers are made conditional on children attending  

school. De Hoop and Rosati (2014) provide a theoretical  

framework for understanding how cash transfers may  

modify household decision-making.