Risk preference and child labor: Econometric evidence

Households may invest in the human capital development of their children not only for altruistic reasons but also as insurance against future income shocks. Therefore, allocation child's time between school and work is a function risk preference household head. This paper analyzes relationship parental preferences child labor decisions using recall information on elicitation question. Results reveal that risk-averse households are more likely to send work. Endogeneity issues addressed by employing instrumental variables. These results suggest be driven need maximize household's expected from child. Regarding heterogeneity, we find effect risk-aversion higher older children. Furthermore, father's matters probability labor, while intensity increases with mother's risk-aversion. The findings call an understanding behavioral context affected how can affect success proposed policies reduce labor.