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Education, Child Labor and Human Capital Formation in Selected Urban and Rural Settings of Pakistan

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Abdul Salam Lodhi

Education is essential for human resource development and sustainable socio-economic development of a society, as it can facilitate economic growth through the broader application of knowledge, skills, and the creative strength of a society. The other positive and long-term outcomes of education include the reduction of poverty and inequality, improvement of health status and good governance in the implementation of socio-economic policies. Keeping in view the role that education through human capital formation can play in the development of Pakistan where the population of the children below 14 years old is about 35 percent of the total population; this study aims at delineating the factors that are obstructing the educational activities of the children below the age of 14 years. Furthermore, the main research interest in this study was to see how pecuniary and non-pecuniary factors are impeding the process of human capital formation. The results indicate that variables such as parental education and perceptions of secular and non-secular education, role of mother in domestic authority, believe in tribal norms, religiosity of the head-of-household, child age and gender, and proximity to school are playing a significant role in the choice of childhood activities.

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2 Factors Determining Childhood Participation in Education and Alternate Activities

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2.1 Introduction Research on the transformation of low-to high-income countries in recent decades suggests that an increase in the educational attainment of the population has played an important role in economic development.21 Theories of human capital formation had already predicted such observations, postulating that education enhances human productivity through the enhancement of cognitive and other skills.22 This chapter presents an evaluation of household, child, and community level determinants of participation in childhood secular education and other alternative activities. Regarding the relationships between poverty, childhood secular education, child labor and other activities, Basu and Van (1998) proposed the “luxury axiom”, stating that children only work when their families are unable to meet basic needs, and the “substitution axiom” stating that adult and child labor are interchangeable substitutes from an employer’s point of view. These axioms proposed a strong association between child labor and poverty, which has been supported by several other studies (e.g., Maitra and Ray, 2002 and Edmonds, 2005). Glewwe and Jacoby (2004) also found a positive and significant relationship between variations in wealth and the demand for education. The study claimed that the wealth effect was valid even after controlling for locality specific factors such as the variability of education returns, availability, quality and related opportunity costs. However, other studies have contradicted such claims, suggesting a more nonlinear relationship between poverty, child labor and education. Bhalotra and Heady (2003) described a “wealth paradox”, stating that children in land-rich households were more likely to engage in labor as opposed to...

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