Globalization, gender and development: The effect of parental labor supply on child schooling

Tariff reductions have gender-specific effects on the labor market that change the relative bargaining power within households, which in turn affects child outcomes. We estimate how changes in parental labor supply due to these tariff reductions affect child schooling by focusing on young school-age children who are otherwise not active in the labor market. Using micro-level data from India, we find that an increase in female labor supply due to the tariff reductions was associated with a 7 percentage points higher schooling probability for children between the ages of 7 and 10. This result explains approximately 26 percent of the improvement in schooling for this age group between the years 1988 and 2000.