Will an increase in landholding size reduce child labour in the presence of unemployment? A theoretical analysis

This theoretical economics paper examines how larger landholdings affect child labour and schooling in rural India when unemployment exists in manufacturing. Using an overlapping generations household model, the researchers found that bigger farms lead children to attend school less in the short term and slow human capital growth initially. However, larger landholdings may eventually increase long-term human capital accumulation at steady state.

Key points

• Increased landholding size reduces child schooling in the short run
• Growth rate of human capital formation declines in the medium term
• Steady state human capital may increase in the long run despite initial negative effects
• Effects occur regardless of whether parents work as agricultural labourers or on own land
• The presence of unemployment in the manufacturing sector shapes these relationships

Limitations

This is a theoretical model without empirical data collection or validation against real-world outcomes. The paper cannot tell us whether these predicted relationships actually occur in practice or how quickly transitions between short-run and long-run effects occur.