| Abstract
|
:
|
In order to understand child labor and schooling decisions of rural Bangladeshi households, and to recommend how policies may reduce child labor and increase schooling in rural Bangladesh, this dissertation uses econometric and economic analyses. The econometric analysis is undertaken using two econometric specifications---the multinomial logit and the sequential probit---to understand the determinants of the household decisions and also to examine the sensitivity of results to the choice of specification. Both specifications resulted in a number of findings: poverty is associated with households not sending children to school; parental education is positively associated with schooling and negatively associated with child labor; farm and business ownership are positively associated with schooling, though they may involve the school-going children also working; and higher village-level child wage rates encourage the combination of child labor with schooling. The results are sensitive to the choice of specification because the marginal effects from the sequential probit are consistently larger than the marginal effects from the multinomial logit. The economic analysis involves estimating the private rates of return to schooling that account for the direct costs of schooling, foregone child labor earnings, and option value. The estimated returns are 11.6 percent for primary schooling, 9.3 percent for secondary schooling, 9.3 percent for higher-secondary schooling, and 9.2 percent for higher education. However, there is no positive option value because borrowing rates are 12 percent or more and the probability of continuation at post-primary levels, given its cost, is small. Low expected returns, therefore, partly explain household decisions to practice child labor and not invest in education at post-primary levels. Based on the econometric and economic analyses, the following policies are recommended for rural Bangladesh: targeting households living at or below the poverty line, removing child labor bans, educating parents, encouraging asset-ownership, targeting girls through further reductions in direct costs, creating jobs for the educated, improving the quality of education, eliminating barriers to securing employment opportunities, and aiding village-level economic development.
|