Abstract:
This paper analyzes the relationship between child labour and schooling outcome, measured by grade-for-age, of children living in rural Punjab. The endogeneity between child labour and schooling was controlled by the use ofinstrumental variables. Using Multiple Indicator Cluster Survey (MICS) 2007-2008, an inverted U-shaped relationship between the two was found, through the two stage least squares instrumental variable technique. The threshold level upto which a child can engage in labour without adversely affecting his studies was found out to be approximately 15 hours per week, implying that children living in rural Punjab can work for 15hours per week without it affecting their grade attainment. Moreover, mother’s education level has a significant positive impact on a child’s grade attainment. This impact is more pronounced for girls than boys. Children having younger siblings and additional school going siblings will suffer in terms of grade attainment due to the added responsibility placed on them by their household. The results also suggest that the children belonging to relatively wealthier households are less likely to lag behind in terms of grade attainment.
