Child Labor and School Achievement in Latin America

Child labor’s effect on academic achievement is estimatedusing unique data on third and fourth graders in nine Latin-Americancountries. Cross-country variation in truancy regulations providesan exogenous shift in the ages of children normally in thesegrades, providing exogenous variation in the opportunity costof children’s time. Least squares estimates suggest thatchild labor lowers test scores, but those estimates are biasedtoward zero. Corrected estimates are still negative and statisticallysignificant. Children working 1 standard deviation above themean have average scores that are 16 percent lower on mathematicsexaminations and 11 percent lower on language examinations,consistent with the estimates of the adverse impact of childlabor on returns to schooling.