You get what you pay for: Schooling incentives and child labor

Abstract

Can schooling promotion deter child participation in hazardous forms of child labor? We examine two interventions intended to promote schooling and deter child labor for children associated with carpet factories in Kathmandu. The first intervention provides scholarships for school-related expenses. The second provides the scholarship and an in-kind stipend conditional on school attendance. Paying for schooling expenses promotes schooling but only at the beginning of the school year when most schooling expenses occur. The scholarship combined with the conditional stipend increases school attendance rates by 11%, decreases grade failure rates by 46%, and reduces carpet weaving by 48%. Financial support lasted one year. Effects on schooling and weaving do not persist past the year of support. “You get what you pay for” when schooling incentives are used to combat hazardous child labor. Keywords: Education; School subsidies; Conditional transfers; School enrollment; Child labor; Labor standards; Nepal