Child labour ban versus Education subsidy in a model with learning by doing effect in unskilled work

This paper builds an overlapping generations household economy model with learning by doing effect in unskilled work. We study the relative effectiveness of child labour ban and education subsidy on schooling. We find some interesting results- the time path of schooling is oscillating but convergent in nature; a fall in child wage does not necessarily increase steady state schooling; if unskilled adult wage is sufficiently small, education subsidy is more effective in enhancing schooling than banning child labour and a child labour ban that increases steady state schooling may not be accompanied by increase in utility level of the household.