Dehejia, Rajeev H.Gatti, Roberta2013-09-092013-09-092002-01https://hdl.handle.net/10986/15753Even though access to credit is central to child labor theoretically, little work has been done to assess its importance empirically. Dehejia and Gatti examine the link between access to credit and child labor at a cross-country level. The authors measure child labor as a country aggregate, and proxy credit constraints by the level of financial market development. These two variables display a strong negative (unconditional) relationship. The authors show that even after they control for a wide range of variables-including GDP per capita, urbanization, initial child labor, schooling, fertility, legal institutions, inequality, and openness-this relationship remains strong and statistically significant. Moreover, they find that, in the absence of developed financial markets, households resort to child labor to cope with income variability. This evidence suggests that policies aimed at increasing households' access to credit could be effective in reducing child labor.en-USCC BY 3.0 IGOCHILD LABORCHILD LABOR LAWSDEVELOPED COUNTRIESDEVELOPMENT INDICATORSECONOMIC ACTIVITYECONOMIC REVIEWEMPIRICAL ANALYSISEMPIRICAL STUDIESEMPLOYMENTFINANCIAL MARKETSHUMAN DEVELOPMENTIMPORTSINCOMEINCOME INEQUALITYINFORMAL SECTORINSURANCEINVESTIGATIONLABOR FORCELEGAL SYSTEMSLEGISLATIONLEISUREMACROECONOMICSPARENTSPOLICY RESEARCHPOLITICAL ECONOMYPOLLUTIONPOVERTY ALLEVIATIONPRIVATE SECTORSAVINGSSCHOOL ATTENDANCEWAGES CHILD LABORINCOME VARIABILITYACCESS TO CREDITHOUSEHOLD INCOMECROSS-COUNTRY EXPERIENCECAPITAL MARKETSGROSS DOMESTIC PRODUCTURBANIZATIONSCHOOLINGFERTILITY RATESLEGAL FRAMEWORKLIBERALIZATIONWorld Bank10.1596/1813-9450-2767