This paper is an extension of the Baland and Robinson theory of child labor efficiency which studies the problem of child labor using a two period model with a general equilibrium approach. To the original theory, we seek to incorporate a non-negative cost of education and an indicator for school quality. Our findings suggest that an increase in costs of education invariably raises the level of child labor. Furthermore, when school quality is poor, improvement in it can decrease the equilibrium level of child labor. In the welfare analysis we find that the conditions for education subsidies to be welfare-increasing suffice for a ban on child labor to be Pareto improving.
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