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The Effect of Commodity Price Shocks on Schooling and Child Labour: Evidence from Mali
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics.
2016 (English)Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

There is an extensive empirical literature on the effects of various economic shocks on child labour and schooling investments in low-income countries, but few studies have addressed how these are affected by fluctuations in agricultural prices. The effects of agricultural commodity price chocks on child labour and schooling is not evident from economic theory since the optimal responses of households will depend on particular assumptions about the institutional setting, which are far from trivial in the context of developing economies. In this study I exploit the sharp increase in the world price of cotton that occurred in 2010/2011 as a result of unusually bad weather conditions in China and Pakistan to estimate the effect of increased agricultural commodity prices on the child labour and schooling decisions of Malian households. The results of this study indicate that the commodity price shock led to a significant decrease in child labour and a significant increase in schooling. These results support the hypothesis that credit constraints and income volatility are important obstacles to efficient human capital investments in low-income countries.

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URN: urn:nbn:se:uu:diva-297516OAI: oai:DiVA.org:uu-297516DiVA: diva2:942180
Available from: 2016-06-23 Created: 2016-06-23 Last updated: 2016-06-23Bibliographically approved

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