The paper was motivated to test whether the high child labor prevalence observed in Ethiopia is explained by the poverty (luxury) hypothesis or wealth paradox theories. The data for this study is the Young Lives project, consisting of 1803 children units (a total of 7212 children in four...

Basu and Van (1998) present a fundamental framework of child labor with two important axioms: the luxury axiom and the substitution axiom. A number of empirical studies, however, reveal a ¡°wealth paradox¡±. The current paper has two aims. First, it develops a model that provides an...

Possession of land is often associated with higher levels of child labour. This paper will look closer at the “wealth paradox†by testing in rural Mali the relationship between landownership and one of the hidden forms of child labour, namely family-based work. We also experiment a...

Using data from Pakistan, we study the effect of family wealth on the utilization of child labor. We find evidence of a positive relationship between land wealth and child labor only for children in the upper quantiles of the distribution. We hypothesize that the so-called “wealth paradox”...