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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.