In the presence of two-sided altruism, i.e., when parents and children care about each other's utility, increases in parental income need not always lead to increases in schooling and to decreases in child labor. This surprising result derives from the systematic way capital market constraints...

When parents and children care about each other's utility, increases in parental income need not always lead to decreases in child labor. Adults raised in poor families make altruistic transfers to their elderly parents, which the parents take as repayment for income lost when their children...

We develop a model in which some child labor is exploitative. Since exploited child laborers are paid less than the value of the marginal product of labor, there is scope for policy intervention to be Pareto improving. We illustrate this by showing that a system of inspection and fines targeted...