Paying Kids to Go to School Instead of Working

A new working paper (abstract; PDF) by Eric V. Edmonds and Maheshwor Shrestha analyzes whether schooling incentives (in the form of conditional cash transfers) effectively reduce child labor, which is a persistent problem in developing countries.  Their conclusion: you get what you pay for.  From the abstract: 

Can efforts to promote education deter child labor? We report on the findings of a field experiment where a conditional transfer incentivized the schooling of children associated with carpet factories in Nepal. We find that schooling increases and child involvement in carpet weaving decreases when schooling is incentivized. As a simple static labor supply model would predict, we observe that treated children resort to their counterfactual level of school attendance and carpet weaving when schooling is no longer incentivized. From a child labor policy perspective, our findings imply that “You get what you pay for” when schooling incentives are used to combat hazardous child labor.


Is this news to anyone? People follow almost any incentive. Ok, now we know paying Nepalese kids to go to school will keep them out of the carpet sweat shops. Who is going to pay for this?

Melissa Belvadi

The US government could probably "fund" the education of every Nepalese child for the same amount that it loses every year in the military budget alone. And by loses, I don't mean "spends", but simply is unable to account for. - note the part about how the Marines alone managed to fail to account for over $2 billion in just one year. That's probably enough for Nepal.


Great idea. We should make it retroactive to 1970.

Paul Brown

Interesting findings. I think it holds some merit, but let's consider other things. How did America get to where it is today? Did we start with tough child-labor laws and then become a superpower, or was it the other way around?

Additionally, where should we stand on minimum age restrictions for children who are also attending school? I started working as a janitor after school when I was 15. I found that it did not impede my progress or development, but rather turned me into a more well-rounded person.

Melissa Belvadi

We "started" with deeply protectionist import/export laws that protected our workers and domestic manufacturing from having to compete with overseas labor, and a political system capable of allowing for a strong labor union system (which we don't seem to have anymore). Getting rid of child labor was as much about protecting adult jobs and not undercutting adult wages as it was any humanitarian concerns.


Of course, in developed countries you could make the opposite argument...there are plenty of kids for whom the structure of modern day schools simply does not work, and whom might be better off learning a trade or otherwise working, rather than sitting in a classroom all day.

Last time I checked, demand for skilled labor (plumbers, carpenters, electricians, etc.) was pretty steady.

Georgette Hanussak

The experiment w/9th graders “incentive” was very interesting. In the end what one young man said seemed to sum the experiment up: “I’ll just join the army & go to Iraq or something, I don’t care”… in the end the ($50/500)incentive was nowhere in comparison to the incentives our gov’t offers these kids….to fail. Perhaps a study should be done on whether or not kids would feel that way if good grades were a prerequisite to joining the armed forces. The breakdown of the American family is the main problem in society, no one home to care… Its not “TV or rock & roll destroyed the mind” … it’s too much of anything.. with no parent to set guidelines, it’s TV & video games all day. No consequences.

Its our gov't that's the biggest failure. Just as little Amanda learned how to manipulate the reward system for doing what she’s supposed to do.. so too society feel entitled & learn to manipulate the system. . “hey if I don’t save I can just live off Social Security”…. “if I choose not to work & therefore no health care coverage, hey the gov’t will force hospitals to remain open & care for me”. ..

The gov’t continues to convince society that taxing the rich & giving some of it (trickle down) to them is the only answer. They made us desperate for jobs that more politics looks like the answer. More & more society has released self dependence & almost all responsibility & turned it over to their Uncle to care for them.. Uncle Sam! The gov’t talks as if we don’t no what’s best for us.. they have to create laws, etc. & the people continue to fall for it. Brainwashed. Its very sad.