Heterogeneous Impacts of Shocks on Child Labour: Evidence from Rural Ethiopia

Abstract

Rural households in developing countries are exposed to a plethora of shocks that usually have unpleasant consequences such as the use of child labour as a coping strategy. We empirically test this using a sample of 1727 children observed in three waves (2010/11, 2012/13 and 2014/15) from Ethiopian Rural Socio-economic Surveys. According to the results from multilevel mixed effects tobit models, idiosyncratic shocks (such as illness or death of family member) drive children to work more outside home while covariate shocks (such as flood, drought, heavy rain, and landslides) increase total hours of child work including household activities such as fetching water and firewood. Results of the study also support the hypothesis that non-labour income and credit access buffer against shocks and prevent households from having to rely on child labour as a coping strategy. Policies that foster smooth functioning of labour markets, coupled with social protection programs that incentivize schooling of children, are likely to be effective in helping households to withstand shocks without resorting to child labour.