Food for education versus school quality: a comparison of policy options to reduce child labour

Abstract.  In a model in which credit markets play a crucial role, we examine two policy options for reducing child labour, 'food for education' and 'investment in education quality,' With an imperfectly elastic supply of credit, an increase in food subsidy is more effective in reducing child labour than an 'income‐equivalent' increase in expenditures in education quality. The effectiveness of the latter policy improves, and the optimal share of resources devoted to this policy increases, at the expense of food subsidies, as the supply of credit becomes more elastic. JEL classification: H52, O10