Analysis of child labour in Peru and Pakistan: A comparative study

This paper analyses child labour participation and its key determinants usi ng data sets from Peru and Pakistan. The results include tests of the 'Luxu ry' and 'Substitution' hypotheses that play key roles in recent studies on child labour and child schooling. The results reject both hypotheses in the context of child labour in Pakistan and suggest that income and related va riables do not have the expected negative effect on children's work input. Rising wages of adult female labour in Pakistan, and falling adult male wag e in Peru lead to increased participation of children in the labour market. The results on the combined country data formally establish the presence o f strong individual country effects in the estimated regressions. For examp le, ceteris paribus, a Peruvian child is more likely to experience schoolin g than a Pakistani child. However, both countries agree on the positive rol e that adult female education and infrastructure investment in basic amenit ies can play in discouraging child labour and encouraging child schooling. JEL classification: C2, D1, I3.