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This article talks about the legal system that we have now is not the most effective way to reduce the number of child labors. Another way to help with the child labors situation is to "fix" its root cause: poverty. Cash transfer, which can reduce poverty, might be able to help. Government gives small amount of money to poor families that meet the conditions, like ensuring their children go to school or visiting a doctor regularly. Some economists think cash transfer is a very helpful way to change the situation because the families are richer now and can afford to send their children to schools. But there are others who think when poor families receive money, they will "invest it in productive assets", like buying livestock. It "boost the returns to child labor", and more children will end up working instead of being in schools. According to a new research based on thirty different studies on child labor issue from the World Bank, cash transfers tend to reduce child labor.
Economists are having a hard time decide whether the changes are due to the increase in income(cash transfer), or due to the requirements of the programs. The author of this article thinks that "conditionality does not seem much better than unconditionality. All that may be needed is a little extra cash".
I think by giving money to poor families is only a temporary solution because once the flow stops, they return to poverty. It is very important to educate families to understand the long term benefits in the future if they put the money into improving the human capital of the household now. This policy not only has affect on the children's time spending on school but also the adult labor supply. Now the adults have to work more to fill in the gap of the income that the child was making before, and this could stimulate the economy. I think the policy is effective and should be continued in the future.
I agree with your conclusion that this policy should be continued in the future. I believe the extra cash decreases the incentive to make a child go to work. Also, I believe you made an extremely important point regarding the need to educate these families when giving them the cash. It is very hard for families living in poverty to think long-term since they are constantly trying to make ends meet on short-term basis. They need to be educated and persuaded on the value of their children having an education and the benefits they will receive in the future because of it.
ReplyDeleteI agree with your point on how these people need to be educated, as well as receive funds to help alleviate the poverty they find themselves in. Ultimately I think with this cash funds transfer program, it is important to help these people out financially, but also to educate them in order to ensure future well-being. It's important to think of a long-term fix, not just a short-term one.
ReplyDeleteThis seems like a system that could be fairly easy to schmooze through, since a lot of the bases for some of these transfers could be self report. That being said, I suppose this is part of the reason we have imputed values as well. And while one can measure how often a kid goes to school, it is hard to measure the effectiveness of the child's schooling (and parents getting them to go to school) and I imagine some of the other factors could be even harder to measure.
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ReplyDeleteAlthough there are certainly flaws to this system (such as in any system, really), in the thirty studies reviewed by the World Bank, CCT programs were successful. The conditional nature of these transfers probably limits the amount that a family could 'schmooze' or otherwise take advantage of the programs. Additionally, I would be surprised to find out that any substantial percentage of parents of children who participate in the child labor force allow their children to do so for any other reason besides desperation. It is amazing to think that a modest CCT of only 2% of the total household expenditures could have a significant impact on the levels of child labor.
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