Examining Child Labor and Parental Altruism from the Rural-Urban Divide: Extending the Inverted-U Empirics

Abstract

Extending the current empirical discourse on the inverted-U to cover non-farm households, this paper replaces the land size (proxy for wealth) with a fully-composed household income from the GLSS6 data that incorporates the value of land and five other components as income. After choosing the ZIP model over the PRM, based on the corrected versions of the Vuong test, the findings supported the inverted-U relationship between household income and child labour. This implies that, at lower levels of income, parents are non-altruistic, using more child labourers with increases in income but become altruistic towards their children at income levels beyond GH₵11,656.2760 ($5,834.26) for all households; GH₵11,308.3877 ($5,660.14) and GH₵22,026.4658 ($11,024.81) for the rural and urban households respectively. The analysis showed that rural-located parents become altruistic at relatively lower levels of income compared to their urban counterparts. Policy should aim at increasing the average income of households.