Child Labor as a Coping Mechanism: Children’s Time Use Responses to Community and Individual Shocks

Abstract: This thesis explores the impact of community and individual shocks on children’s time use and aims to determine if and under what conditions households use child labor as a response to shocks. For this purpose, four survey rounds of a panel of Ethiopian children aged 5 to 15 are analysed. To address endogeneity problems and to overcome issues related to the data acquisition process, both a fixed effects and a matched difference-in-difference model are applied. The results show that children significantly increase their hours of work when they experience either of the two shocks, while this is not the case for hours spent on chores. Factors like age, the socioeconomic and the rural/urban status lead to heterogeneous results. However, no gendered effects are found. This thesis provides important policy recommendations concerning the importance and the nature of formal coping strategies that should be provided for households to be able to deal with shocks without resorting to child labor.