Child labour as a response to shocks: evidence from Cambodian villages

The paper analyses the effect of different shocks on household decisions concerning children’s involvement in work and school in rural Cambodia. It examines the differential impact of three different types of shocks using propensity score matching and double difference estimates extended to the case of multiple treatments. The findings indicate that household responses to shocks depend considerably on the specific type of shock encountered. As a result, the policies required to manage and help cope with risk must also vary depending on the kind of shock encountered.

The results obtained clearly confirm the intuition that not all shocks are alike in terms of their consequences. The shocks considered here are somehow similar in nature, being all related to natural events, but they are likely to produce different effects. In particular in the case of Cambodia, floods are more likely to have a direct impact on public and private infrastructure, and possibly also on the income generating potential of the household. Droughts and, especially, crop failure, on the other hand, have a more direct impact on the earning capacity of the household. The results presented here seem to indicate that, at least in Cambodia, natural shocks are relevant to household decisions mainly by reducing the income of the household rather than through their effects on infrastructure.

Overall this evidence indicates that policies aimed at reducing exposure to risk and at helping to cope with the negative consequences of shocks are helpful in reducing children’s work and promoting education.