This paper investigates the impact of income and non-income shocks on child labour using a model in which the household maximizes utility from consumption as well as human capital development of the child. Two types of shocks are considered: agricultural shocks as an income shock and the death...

In the absence of developed financial markets, households appear to resort to child labor to cope with income variability. This evidence suggest that policies aimed at increasing households' access to credit could be effective in reducing child labor