A Thesis Submitted to the College of
Graduate Studies and Research
In Partial Fulfillment of the Requirements
For the Degree of Master of Arts
In the Department of Economics
University of Saskatchewan
Nardos Kebreab Tesfay
© Copyright Nardos Kebreab Tesfay, June 2003. All rights reserved ii PERMISSION TO USE
In presenting this thesis in partial fulfillment of the requirements for a Postgraduate Degree from the University of Saskatchewan, I agree that the Libraries of this University may make it freely available for inspection. I further agree that permission for copying of this thesis in any manner, in whole or in part, for scholarly purposes may be granted by the professor or professors who supervised my thesis work or, in their absence, by the Head of the Department or the Dean of the College in which my thesis work was done. It is understood that any copying or publication or use of this thesis or parts thereof for financial gain shall not be allowed without my written permission. It is also understood that due recognition shall be given to me and to the University of Saskatchewan in any scholarly use which may be made of any material in my thesis.
Requests for permission to copy or to make other use of material in this thesis in whole or part should be addressed to:
Head of the Department of Economics
University of Saskatchewan
This paper examines the relationship between national income and child labour. We are particularly interested in evaluating the economic role of children at different stages of development. Our objective is to show that in the aggregate, at a low level of development the direction of the relationship between the incidence of child labour and per capita income is indefinite. Child labour may increase or decrease with income. Forecasts of the child labour force participation rate as well as per capita gross domestic product are made for each country in the sample. We also forecast future levels of the primary net enrollment ratio in an effort to provide empirical support for our policy recommendations.
Using panel data methodology, we find evidence of an inverted-U, Kuznets-like relationship between the child labour force participation rate and per capita GDP. The relationship is significant for the total sample and the sample for which per capita GDP is above US$1000. Holding all else constant, forecast results suggest that for those countries on upward sloping part of the curve, child labour is a problem that will persist for many years to come. The growth rates of per capita GDP required to reach 10 per cent child labour by the target date, 2029, range from 2 per cent to 15 per cent. iv ACKNOWLEDGEMENTS
I would like to take this opportunity to thank Professor Mobinul Huq for providing me with guidance throughout my research, as well as an excellent suggestion for a thesis topic. I especially thank Professor Huq for his willingness to organize and interpret my frequent rash ideas and loose assumptions. This will be my final year at the University of Saskatchewan and so I would also like express my gratitude to Professor Huq, on behalf of the graduate students, for his genuine concern, most especially for his rigorous efforts to ensure that we were all funded and well fed. My thanks to Professor Cristina Echevarria, Professor Morris Altman and Professor Jim Handy for their insightful comments and helpful research material. Heartfelt thanks to Professor Echevarria and Professor Huq for their guidance and counsel over the years. I would like to express my profound and humble and gracious thanks to my family, for their love, guidance and encouragement. I thank my parents for instilling in me the value of an education. Thank you for allowing me to stray from the flock on occasion and find my own way....