Child labor and the interaction between the quantity and quality of children

This paper analyzes the impacts of child labor on the interaction between the quantity and quality of children in the spirit of Becker and Lewis (1973). It shows that without child labor, the quantity of children can be a normal good so that it increases with parental income under some fairly standard formulations. However, the correlation between fertility and parental income becomes negative when the role of child labor is considered. The model also implies that fertility increases with the wage rate of child labor. Moreover, it suggests that government intervention not only directly affects the supply of child labor, but also influences parents’ decisions on fertility, which indirectly determines children’s labor market participations. * I am grateful to Robert Margo (the co-editor) and an anonymous referee for constructive comments and suggestions that improved the paper significantly. I also thank Ping Lin and Ann Owen for discussions and Anna Splaingard for editorial help. The remaining errors are entirely my own.