Incorporating family decisions in a two-period.model of the world economy, we predict that trade liberalization raises the skill premium and reduces child labour in developing countries where the adult labour force is sufficiently well educated to attract production activities from abroad that...

The literature suggests that the household invests in the human capital of a child member not only for altruistic reasons but also as insurance against future income shocks. Hence, the allocation of the child's time between school and work is a function of the risk preference of the household...

Basu and Van (1998) show that a ban on child labour may be self-enforcing under the extreme assumption that, above the subsistence level, no amount of consumption can compensate parents for the disutility of child labour. We show that a partial ban may be self-enforcing also in a more general...