Child labor and school dropout in least-developed countries: Empirical evidence from Lao PDR

Abstract

Even though topics related to child labor and school dropout have been studied worldwide, little attention has focused on child labor and school dropout in the least-developed countries. This paper examines the impact of child labor on school dropout by using national representative data from the Labor Force and First Child Labor survey in the Lao PDR, which serves as a case study of a least-developed country. The endogeneity of child labor to school dropout was controlled by using an average wage of children by province as an instrumental variable. Findings indicate that child labor, especially with regard to girls, has a strong impact on driving school dropout. Our estimations also show that parental educational attainment, particularly mother’s education, seems to show a significant effect on reducing the probability of dropping out. With respect to family economic status, results indicate that the probability of children dropping out tends to be greatest for children from poor families. Our evidence supports the need to provide the type of free education programs that have been implemented in all developed countries but which have not yet been established in least-developed countries such as the Lao PDR. At the very least, given limited government budgets, support can be targeted to help vulnerable groups and poor families.