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ISER Working Paper Series 2006-28

Measuring the economic vulnerability of children in developing countries: an application to Guatemala

Authors

Publication date

01 Jun 2006

Summary

Anti-poverty policy in low income countries has, for obvious reasons, focused mainly on the measurement of the extent of poverty, the identification of the poor and the design of policies to alleviate their plight. Recently, there has been an effort to extend research to identify those who are judged to be not poor at present, but vulnerable to poverty in the future. If this can be done, then it is possible to design policies intended to protect these vulnerable people from future adverse outcomes - in medical terminology, prevention rather than treatment.
We focus our analysis of vulnerability and the consequent policy design on two factors particularly associated with the transmission of poverty between generations. Inadequate education and child labour are closely associated with chronic poverty and have received a great deal of attention from researchers and policy-makers. In this paper, we concentrate on these two aspects and, as a complement to 'treatment'-style studies of the extent and distribution of inadequate education and child labour, we develop and apply new methods for the measurement and empirical analysis of vulnerability to future premature school leaving and/or onset of child labour. We do this by analysing recall data on the age of school leaving and commencement off work. We estimate statistical models of the age specific hazards of dropping out of school and commencing child labour, as functions of age and the characteristics of the child and its family.
Premature school-leaving and child labour are very common in Guatemala. Around 500,000 children aged 7-14 (one fifth of this age group) are engaged in work and around 640,000 (a quarter of the age group) are not in school. Approximately 440,000 (17%) are 'idle', in the sense of being neither in school nor in employment. Our results reveal hazards of school drop-out and onset off child labour that rise with age. There is a significant peak at age 10 in the hazard of movement into work but a smoother increase in risk for school drop-out. Girls have a higher risk of premature school-leaving than boys, but are more likely to move into an 'idle' state without involvement in formal work. Children from poor rural indigenous families face the greatest risks of child labour and premature exit from schooling.
On the basis of this analysis, we develop a simple indicator of vulnerability and use it to identify characteristics that are associated with high vulnerability and that can be used for policy targeting. A combination of gender, ethnicity, region of residence and land ownership are useful to identify groups at risk. For example, it is in the North, North-West, Peten and Central regions that vulnerability is most heavily concentrated. Around three quarters of highly-vulnerable children are located among the indigenous people of those four regions, who make up only slightly more than a third of the total child population.

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