Globelics 2010

8th International Conference

Making Innovation Work for Society:

Linking, Leveraging and Learning

1 - 3 November 2010
University of Malaya, Kuala Lumpur, Malaysia

A Significant Impact of Child Labor on Pakistans Economy

Name of
Corresponding Dr Adiqa Kausar Kiani
Author

Title & Position Associate Professor

Institution & Full Federal Urdu University of Arts, Science and Technology, G-7/1
Postal Address Islamabad, Pakistan

E-mail Address adiqakiani@fuuastisb.edu.pk

adiqakian@gmail.com

Globelics
The Global Network for Economics
of Learning, Innovation, and
Competence Building Systems

1
A Significant Impact of Child Labor on Pakistans Economy

Abstract
In developing countries, children have long been largely ignored in public policy-making and the development of
program strategies for improving their welfare. The complex issue of child labour is a developmental issue worth
investigating. The motion that children are being exploited and forced into labor, while not receiving education
crucial to development, concerns many people. This study focuses on child labor in Pakistan. The result shows that
child labor has a negative but significant relationship with the literacy rate for both 10-14 year age and 15 years
and above, while Per capita income did not slow any significant result. The study proved that literacy rate and
household size have negative influence on the child labour overall.

Introduction
Child labour is a big problem all around the world, which accounted for approximately
350 million children are child labour (Human Rights Watch, 2004). Child labour is generally
speaking, work that harms them or exploits them in some way (physically, mentally, morally or
by blocking access to education and normal healthy growth.
This convention, employment of Children Act (1999) was adopted from International
Labour Organization (ILO) in 1973. It is stated that minimum age for employment may not be
set lower than the age of completion of compulsory schooling and, in any event not less that 15
years (initially 14 years in case of developing countries). Although, spirit of this convention is
reflected in several Pakistani laws, formally it has been ratified by the government of Pakistan
(Magnitude of Child Labour in Pakistan, 2003).
The main cause of child labour is poverty in Pakistan. About thirty percent of the
population lived below the poverty line; in our country which compels the children enter into the
labour market to earn a livelihood for their own survival and to supplement the incomes of their
families. These children being deprived of educational opportunities live in a stressful situation
through out their life and gave birth to a generation of their own type when they grown up.
Hence the chains of poverty and darkness are never broken. According to the National Survey of
Child Labour conducted in 1996 by the Federal Bureau of Statistics with the collaboration of
ILO, the total number of children in Pakistan aged 5-14 years was 40 million. The total number
of children was found to be 3.3 million (or 8.3 percent of the total children) in the country. About
73 percent of the child workers (73 percent) were found to be boys, while 27 percent were girls.
Majority of the child workers (58.6 percent or 1.94 million) were found in Punjab. It was also
found that children involved in work were about 8 times in the rural areas witch may be greater

2
than in urban areas. About one third of the working children were literate, boys being more
educated than girls and urban children were educated more than the rural children. Employment
status by broad categories 1 indicated that about 70 percent of the child labour was unpaid family
helpers. Significant urban rural differentials were observed under the broad category of
employment status. In rural areas, three fourth of the child labour were working as unpaid family
members, while in the urban areas it was one third. About 46 percent of the child labour worked
more than 35 hours per week and good proportion worked 56 hours or more 2.
There are different reasons of child labour, poverty may be one of the basic reason. The
incidence of poverty in Pakistan is not decreasing over time due to political uncertainty, poor law
and order condition, low economic growth, high income inequality, corruption, unemployment
paucity of resources and trade deficits etc. Further, Pakistans high population growth rate of
2.22 percent posses multiple challenges, problems and threatens to constrain the limit resources
and economic development of the country (Kiani, 2007). As a result of high rate of population
growth, a large work force seeking employment is regularly being inducted into labour market of
the country. It is very difficult for parents to provide the primary education to the children of
poor families.
Schooling problems further add to the child labour. Many times, children aged (10-14)
years seek employment because there was no access to schools for these children. In rural areas
of Pakistan, most of the schools are either without teachers or inadequate staff. As a result,
parents may not send their children to schools when they could be helpful to the parents in their
work or supplement the family income by doing work. Sometimes, parents send their children to
make them mechanic, electrician, tailors etc. for their specialization.
In Pakistan, there has been a decrease in the proportion of child labour over the 1990s
and therefore, it is important to investigate how this decrease has been affected by the
Employment of Children Act 1991 (ECA) (Fasih, 2004). This paper aims to do so by exploiting a
quasi-experimental approach to analyze the extent to which the ECA 1991 affected the decrease
in child labour in Pakistan. Since the ECA specifies a minimum age of 14 years for work. It is
expected that it would affect employment rates primarily of children less than 14 years old. In
this paper using regression discontinuity data design, we have used the difference-in-difference

1
Agriculture, Manufacturing etc.
2
Source: Federal Bureau of statistics: National Child Labour Survey(Islamabad 1996)

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estimator to isolate the effect of legislation from the effects of other factors influencing the child
labour market.
The minimum age for work laws target child labour by reducing the demand and/or
supply (depending on the provisions of the Act and how it is implemented) of child labour. This
could help address labour market distortions by raising adult wages and reducing the need for
households to send children to work for financial reasons (Basu 2000). There have been attempts
to theoretically explain the impact that legislation might have on childrens work. Rogers and
Swinnerton (2002) developed a model of exploitative child labour. A key feature of this model
was that the exploitative labour occurs because parents have imperfect information about
whether the employment opportunities available to their children are exploitative or not. In such
a model, a ban on exploitative child labour was desirable and leads to Pareto efficiency since it
resolved the problem of imperfect information faced by parents.
Betcherman et al (2004) suggest that child labour and compulsory education laws can be
effective tools for reducing child labour in a number of scenarios. First, in the lines of Roger and
Swinnerton (2002) they suggest that it can be effective if the parents do not have full information
about the benefits of education or if the parents are not altruistic and exploit children for their
economic benefit.
In Pakistan we expect the former to exist, in particular because of the high unemployment
rates of educated youth which can act as a deterrent for the motivation of both children as well as
parents towards education. The latter scenario may be true for Pakistan as well, not necessarily
because of a lack of altruism, but rather since the concept of childhood in developing countries is
one where the children also hold some responsibility to help the household adults in a number of
ways, one of which usually is helping on household farms or enterprise, but can also extend to
working in the labour market to help the household maintain a minimum subsistence level of
consumption.
The objectives of the study are (i) how the child labour and literacy rate is related. (ii) Is the child
labour affected by changing the literacy rate, household size and per capita income.
Chaudhri, S (2004) examined the implications of a subsidy policy on education and of different
liberalized trade and investment policies on the incidence of child labour in a developing
economy. He applied three sectors general equilibrium model. He used labour output ratio,
capital output ratio, proportion of the effective labour endowment, elasticity of substitution

4
between labour and capital, world price tariff rate, domestic price of adult wage rate, child wage
rate etc. This paper showed that if trade, liberalized programmes and free education policy are
under taken simultaneously, effect on the supply of child labour may not be quite satisfactory as
different policies produce mutually opposite effects on the incidence of child labour.
Ghayur, S (1997) examined different measures to remove child labour. He pointed out
that the main causes of child labour in Pakistan are poverty, illiteracy and indifferent attitudes of
the parents and society. He concluded that there must be focus on revamping school education
and primary education, designing poverty alleviation programmes, evolving a social security
mechanism, vigorous implementation of laws and special projects should be undertaken to
discourage child labour.
Jafri, S.M. et al (1997) analysed various characteristics of child labour in Pakistan. This
study is based on micro data of child labour falling between 5-14 years of age for the period of
1990-93. The study revealed that the volume of child labour, age cohort of 10-14 years grew up
from 1.8 million (1990-91) to 2 million (1992-93). Flow of child labour statistics on a continuous
basis is essential for the formulation and implementation of policies, regulations and
programmes which are aimed not only at the minimization of the negative consequences of child
labour in short term but most importantly at childrens rehabilitations and then the eventual
elimination of the practice.
Ray, R. (2001) examined simultaneous analysis of child labour and child schooling in
Nepal and Pakistan for the time period 1981-1990, using SLS technique. He used labour hours as
dependent and educated male member, educated female member, maximum wage earned by
male members, maximum wage earned by female member as independent variables. The
important findings of this paper were that joint estimation of the child labour hours and child
schooling experience exertions is the significant rate that childs current school attendance plays
in sharply diminishing labour hours. Rising education levels of the adults members in the
household and increased public awareness have a highly insignificant positive impact on child
schooling and subsequently can play important part in reducing the childs long labour hours.
Chaudhry, M. A. et al (2002) studied economic and social determinants of child labour
for Dera Ismail Khan, District of Pakistan. He used distribution of monthly earnings of the
children as dependent and number of working children of male and female, number of wage and
earning of children income group as independent variables.

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 They found that in Dera Ismail Khan children worked the longest hours and were low
paid of all labourers. Most of the children in the District are exposed to dust and firms in repair
shops, wood work and metal work factories. Children are put to work in such a way which
destroyed the right to normal physical and mental development. Children were at great risk
faced eye sight problem, bone deformities, chronic long diseases and some time it leads to death.
Toor, I. A. (2005) examined child labour link with literacy and poverty in Pakistan. He
used multiple regression model for estimation purposes. He used male child labour force as
dependent and child labour as percentage of total population aged 10-14 years, literacy rate
population aged 10-14 years, per capita income of each district, deprivation index of each
district, household size of each district as independent variables. The main finding of this paper
was that to raise the income of head of household which would simultaneously increase literacy
rate. Literacy will automatically help in reducing male and female child labour. Improvements in
schooling would both discourage child labour and significantly improve the human development
index.
Fasih, T. et al. (1998) examined determinants of child labour in Punjab. He used utility
function as dependent variable and leisure hours for husband, leisure hours for wife, leisure
hours for children in household and consumption of all goods other than leisure as independent
variable. Major findings of the paper were that age and gender of the child affect the child
probability of working and going to school. Mothers education positively affects childs
schooling decisions and mothers employment however negatively effects the probability of child
schooling and positively affects decisions to work. They suggested that government interference
and local support groups such as non-governmental organizations (NGOs) can help to reduce
the child labourers.
Mahmood, M. et al. (1989) examined different issues relating education in most
developing countries for the years 1979-1987. The major issues were illiteracy, inefficiencies
within the school system which effect school output and quality of education etc. The objective
of the paper was not only gathering data on educational variables but also to see the relative
standing of Pakistan in educational field. The findings of the paper showed that budget
allocations in Pakistan for education sector are very low. It was sad to conclude by authors that
much remains to be done in the field of education to meet the challenges of 21st century.

6
 Khan, R. (2003) examined the determinants of child labour. Using primary data from two
districts of Punjab, he analysed the supply side determinants of child labour using logit model.
He used child who goes to school, child who goes to school as well as to work, child who does
not go to school, but goes to work child who neither goes to work nor to school as dependent
variable and birth order of child, child gender, child age, childs education, head of households
genders, head of households age, head of household education, head of household employment,
head of household income, father education, fathers employment, Fathers income. Mothers
education, mothers employment, mohters income, households ownership of assets, per capita
expenditure of household, and household family size as independent variables. The major finding
of this paper was that parental educations showed positively relationship with child schooling
and negatively with child labour. The household size affects schooling negatively and work
positively and household composition also has a significant effect on schooling and child labour.
Ghayur S. (1996) examined market issues in Pakistan, unemployment working conditions
and child labour for the time period 1960's to 1996. The main finding of this paper was
employment conditions force other family members to become active in the labour market on
any wage, and on any terms and conditions. Consequently the malpractice of child labour was
also flourishing. The working children were confronted with harsh working conditions but with
fewer wages. Further they were also being denied of their fundamental right to childhood and
education.

Child Labour: A Genesis

Child labour has always existed in human history but is never gained as much attention as in the
last six decade or so. However, before carrying out any research on the subject, it is important to
know exactly what child labour is and also recognize what is not child labour. Obviously, all
work done by children can be dubbed child labour for the simple reason that there exists a
difference between child work and child labour. Child work is understood to be the work
performed by a child at a family farm or enterprise under a protected atmosphere: child is asked
to work before or after the school hours and his physical, mental, spiritual, psychological and
intellectual growth is not compromised. In other words, he or she is not exploited.
In the contrary, child labour involves tough working conditions under which children are
forced to toil for 8-10 hours a day under adverse conditions, which rob children of childhood.

7
These are child labourers and the work done by theme is child labour. They are the victims of an
economic system which creates condition for child labour. The key difference between child
work and child labour is that the former is aimed at developing work skills in the child while the
latter involves exploitation of child and hinders his mental and physical growth.

Reasons of Child Labour

Wrong Poverty Govern-

intention ments
of Policy
factories. Failure

Weak
Laws Lack of
to schools for
protect study

Reasons
of CHILD
Over LABOUR
High
popu- education
lated and living
cost
family

Lack of Parents
incentives Under- want more
and service employmen income
t/
Unemploy-
ment

The International Labour Organization (ILO) has estimated that 250 million children
between the ages of 5-14 years worked in developing countries, at least 120 million on a full
time basis. 61 percent of these were in Asia, 32 percent in Africa, and 7 percent in Latin
America. Most of the children worked in rural areas were found in agriculture and in urban areas
found in trade and services, with fewer in manufacturing, construction and domestic service.
Conditions of child labour ranged from that of four-year-olds tied to rug looms to keep
them from running away, to 17 years olds helping out on the family farm. In some cases, a
child's work can be helpful to him/her and to the family; working and earning can be a positive
experience in a child's growing up. This depends largely on the age of the child, the conditions in
which the child works, and whether work prevents the child from going to school.

8
 Poverty is widely considered the top reason why children work at inappropriate jobs for
their ages. But there are other reasons as well -- not necessarily in this order:
"The parents of child labourers are often unemployed or underemployed, desperate for
secure employment and income. Yet it is their children - more powerless and paid less - who are
offered the jobs. In other words, says UNICEF, children are employed because they are easier to
exploit," according to the "Roots of Child Labour" in UNICEFs 1997 State of the Worlds
Children Report.
Current Situation in Poor Countries
Poor families often rely on the labours of their children for survival, and sometimes it is
their only source of income. This type of work is often hidden away because it is not always in
the industrial sector. Child labour is employed in subsistence agriculture and in the
urban informal sector; child domestic work is also important. In order to benefit children, child
labour prohibition has to address the dual challenge of providing them with both short-term
income and long-term prospects. Some youth rights groups, however, feel that prohibiting work
below a certain age violates human rights, reducing children's options and leaving them subject
to the whims of those with money. The reasons a child would consent or want to work may vary
greatly. A child may consent to work if, for example, the earnings are attractive or if the child
hates school, but such consent may not be informed consent. The workplace may still be an
undesirable situation for a child in the long run.
Basu and Van (1998) argued that the primary cause of child labour is parental poverty.
That being so, they caution against the use of a legislative ban against child labour, and argued
that should be used only when there is reason to believe that a ban on child labour will cause
adult wages to rise and so compensate adequately the households of the poor children.
Child labour is still widely used today in many countries, including India and
Bangladesh. Even though country law states that no child under the age of 14 may work, this law
is ignored. Children as young as 11 go to work for up to 20 hours a day in sweatshops making
items for US companies, such as Hanes, Wal-mart, and Target. They get paid as little as 6 and a
half cents per item. One of the largest companies in Bangladesh is Harvest Rich, who claim not
to use child labour.

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Situation of Child Labour in South Asia
Based on officially available statistics, it is estimated that there are 21.6 million children,
aged between 5 and 14 years, working in south Asia out of a total of 300 million children in this
age group.
The factors that generate child labour in south Asia include parental poverty and
illiteracy; social and economic circumstances; lack of awareness; lack of access to basic and
meaningful quality education and skills, and high rates of adult unemployment and under-
employment. Attitudes towards child labour also play an important role. In south Asia, children
are perceived as 'adults' at an early stage. Children are expected to perform physical work
equivalent to an adult as early as 10 years old in some countries.

Table 1: Socioeconomic Indicators of South Asian Countries

Countries
Bangladesh India Nepal Pakistan Sri Lanka

Total Population (million) 143.80 1049.50 24.60 149.90 18.90

Population under age 15 ( of total), 2002 38.30 33.30 40.20 41.50 25.00
GDP/capita (PPP US$), 2002 1,700.00 2,600.00 1,370.00 1,940.00 3,570.00
Population living below the national poverty 49.80 28.60 42.00 32.60 25.00
line (%), 1990/01
Working Children (5-14 years) (million) 35.06 210.00 6.23 40.00 3.18
Total Number of Children (5-14 years) 5.05 11.20 1.66 3.30 0.46
(million)
Source: Human Development Report 2004.

Situation of Child Labour in Pakistan

According to the National Survey of Child Labour conducted in 1996 by the Federal
Bureau of Statistics with the collaboration of ILO, the total number of children in Pakistan for
the age groups of 5-14 was 40 millions. The total number of economically active children was
found to be 3.3 million (or 8.3 percent of the total children) in the country. 73 percent of the
child workers were found to be boys, while 27 percent were girls. Majority of the child workers
(58.6 percent or 1.94 million) were found in Punjab. The survey also found that childrens
involvement in work in the rural areas is about 8 times, greater than in the urban areas working
as unpaid family members, while in the urban areas it is one third. About 46 percent of the
working children work more than 35 hours per week and a good proportion work 56 hours or
more.

10
 Poverty is considered as main reason of children labour. About thirty percent of the
population lived below the poverty line, which compels the children to enter the labour market to
earn a livelihood for their own survival and to supplement the incomes of their families. Hence
the chains of poverty and darkness are never broken.
The incidence of poverty in Pakistan is not decreasing due to political uncertainty, poor
law and order condition, low economic growth, corruption, unemployment paucity of resources
and trade deficits etc. As a result, of high rate of population growth a large work force seeking
employment is regularly being inducted into labour market of the country. Last but not the least
the employers encourage child labour simply because it is cheap and obedient, children are
generally paid low wages or sometimes only food is provided to them.
A large number of children are seen working in the streets: The next category of child
labour is seen in auto repair workshops. The third major employment for boys is road side hotels.
A large number of children work in agriculture sector. One of the most difficult child labours is
working in brick kilns.

"Myths" Or Misunderstandings about Child Labour?

UNICEF listed four "myths" of child labour (UNICEF 1997). These are as follows:
1. It is a myth that child labour is only a problem in developing countries. "But in fact,
children routinely work in all industrialized countries, and hazardous forms of child
labour can be found in many countries. In the US, for example, children are employed in
agriculture, a high proportion of them from immigrant or ethnic-minority families. A
1990 survey of Mexican-American children working in the farms of New York State
showed that almost half had worked in fields still wet with pesticides and over a third had
themselves been sprayed."
2. It is a myth that child labour will only disappear when poverty disappears. Hazardous
labour can, and should be eliminated by even the poorest countries.
3. It is a myth that most child labourers work in sweatshops making goods for export.
"Soccer balls made by children in Pakistan for use by children in industrialized countries
may provide a compelling symbol, but in fact, only a very small proportion of all child
workers are employed in export industries - probably less than 5 per cent. Most of the

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 worlds child labourers actually are to be found in the informal sector, selling on the
street, at work in agriculture or hidden away in houses far from the reach of official
labour inspectors and from media scrutiny."
4. It is a myth that the only way to make headway against child labour is for consumers and
governments to apply pressure through sanctions and boycotts. While international
commitment and pressure are important, boycotts and other sweeping measures can only
affect export sectors, which are relatively small exploiters of child labour. Such measures
are also blunt instruments with long-term consequences that can actually harm rather than
help the children involved."
What are Some Solutions to Child Labour?

Not necessarily in this order:

1. Increased family incomes
2. Education helps children learn skills that will help them earn a living
3. Social services help children and families survive crises, such as disease, or loss of home
and shelter
4. Family control of fertility so that families are not burdened by children
The ILOs International Programme for the Elimination of Child Labour (IPEC) has
explored many programs to help child labourers. See IPEC documents on the www.ilo.org site.
The 1989 Convention on the Rights of the Child calls for children to participate in
important decisions that will affect their lives. Some educators and social scientists believe that
one of the most important ways to help child workers is to ask their opinions, and involve them
in constructing "solutions" to their own problems. Strong advocates of this approach are Boyden,
Myers and Ling; Concerned for Working Children in Karnataka, India; many childrens "unions"
and "movements," and the Save the Children family of non-governmental organizations.
Estimated Model
For estimation purpose, Cobb Douglas Production Function is written as:
4
Y = A X 1i
i =1

Y = AX 1 1 X 2 2 X 3 3 X 4 4
Taking natural log on both sides.

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 ln Y = ln A + 1 ln X 1 + 2 ln X 2 + 3 ln X 3 + 4 ln X 4
Our estimated model in linear form would be
4
ln Y = ln A + i ln X i +
i =1
Where =Random error
In this study, we used four independent variables and one dependent variable, defined as:
Where:
Y = Child labour as percentage of total population aged 10-14 years.
X1 = Average household size of Pakistan (numbers).
X2 = Literacy rate population aged 10-14 years (percentage).
X3 = Literacy rate population aged 15 and above years. (percentage).
X4 = Per capita income of Pakistan including Agriculture and Manufacturing
(Rs millions)
Per capita income = Total National Income (Rs. Million)
Total Population |(Million)
We used literacy rate of population aged group 10 to 15 years, literacy rate population
aged 15 and above years , per capita income of house hold, and household size as explanatory
variables and child labour of both sexes male and female is used as dependent variable.
We made our estimation possible by excluding one variable out of four and done by
considering two log linear regression models. In model 1, we have included literacy 2 (Aged 10-
14 years), and in model 2, we include literacy 1 and estimated the model.
4
ln Y = ln A + i ln X i +
i =1
Model 1
4
ln Y = ln A + i ln X i +
i =1
Where
2 = 0 2 = literacy 2
Model 2
4
ln Y = ln A + i ln X i +
i =1
Where
1 = 0 1 = literacy1

By considering above two log linear regression models we examined the relationship
between child labour and many other variables along with literacy 1 and literacy 2.

In this study, we rely primarily on two of the large available source of labour force data in
Pakistan, namely the Household Integrated Economic Survey (HIES) (various issues) and

13
Labour Force Survey (LFS) Federal Statistics, Government of Pakistan (various issues). Literacy
rate aged 10-14 years, literacy rate aged 15 and above years, per capita income and household
size are used as independent variables, and child labour used as dependent variable. Percentage
income in millions is constructed by divided the national income (in millions) with total
population per year. Summary of the variables is given briefly in Table 2.

Table 2: Summary of Variables

Code Variable Units of Description
Measurement
Y Child Labour Percentage Child labour of total population aged 10-14 years.
X1 Household Number household size of a family in Pakistan
X2 Literacy 1 Percentage Literate children aged 10 to 14 years.
X3 Literacy 2 Percentage Literate population aged 15 years and above.
X4 Per capita Million Per capita income of employed persons taking only
income Agriculture and Manufacturing sectors of Pakistan.*

*In most of studies, Agriculture and Manufacturing Sector is used as most of the child labour
worked in these two major sectors (Toor, 2005).

Table 3: Summary Statistics of the Dependent and Independent Variables

Variables Mean Standard Maximum Minimum
Deviation
Child Labour 16.3387 5.5658 26.9700 10.9400
Household 1223 23.11 5678 1021
Literacy1 10.1375 1.1623 12.7100 8.5240
Literacy2 27.3338 3.7252 33.0300 22.1500
Per Capita 4998.3780 1257.3990 9154.1160 3761.6550
Income

Results and Discussion

We have estimated two models applying OLS technique. In model 1, we included literacy
rate of population aged less than 15 years. While in model 2, we have dropped literacy rate of
population aged less than 15 years and include literate people aged 15 years and above and apply
OLS techniques.

14
 Regression results are given in Table 4 using child labour as dependent variable and
household size, literacy 1, literacy 2 and per-capita income as independent variables.
In Table 4 using model 1, literacy shows negative and also significant impact on child
labour, which implies that more literate the children are, less will be the child labour.
Improvement in schooling would discourage child labour as high literacy rate would influence in
reducing child labour. Household size and per capita income did not show any significant impact
on child labour. But the sign of household size is consistent with the theory as it is positive
which implies that increase in size of household increase the number of child labour.
Sign of per capita is still inconsistent with the theory. One of the reason may be that the
low per capita income would group enforced the child labourers to do work in labour market.
That is why income in Pakistan during 2006-2007 which is not very good as compared to
developing countries. Also dependency ratio in Pakistan was during 2006-07 was further
aggravates the situation and overall number of child labourer are rising.
In model 2, using literate more than 15 years and above. Results showed that household
size and literacy 2 are both significant showing correct a sign as it was required. Per capita
income does not show very good result in model 2, as in model 1.

Table 4: Regression Results of Model 1 and Model 2

Variables Model 1 Model 2
Constant 15.9158 6.7931
(7.2511)* (1.2142)***
lnHousehold 3.6453 4.5321
(1.2460)*** (2.0560)**
lnLiteracy 10-14 years -2.0697
(-5.4863)*
lnLiteracy 15+ years -1.7855
(-2.001)**
lnPer Capita Income 0.2768 0.2299
(1.4123)*** (0.6253)
Adj-R2 0.8089 0.4973
F-Statistics 22.1645 5.9464
D.W test 2.2989 2.3391
Mean Dependent Variable 2.7445 2.7745

* Significant at 1% level. ** Significant at 5% level. *** Significant at 10% level

Figure2: Relationship Between Child Labour and Literacy Rate(10-14 years)

15
 Child Labour
30
25

child labour
20
15
10
5
0
0 5 10 15
literacy1

Figure 2 shows the relationship between child labour and their education level, which
does not show any particular pattern and indicated that child labour is always existed no matter
literacy rate changes (increase/decrease). The reason may be that children are working in some
factories and also getting education in some schools.
From the scatter diagram, we can not develop any particular conclusion about child labours and
their education.

Figure3: Relationship Between Child Labour and Literacy Rate(15 years and above)
Child Labour
child labour

30
20
10
0
0 5 10 15 20
literacy 2

Figure 3 shows relationship between child labour and literacy rate of adults aged 15
years and above. When people were more educated, their were less incentives for their children
to do work in labour market. It shows negative relationship between child labour and literacy of
adults (15>).
Conclusion and Policy Implication
It is concluded that a negative but significant correlation was found between child labour
and literacy rate that shows the importance of childs education. Improvements in school
enrolments further discourage the children to work in labour market and though significant
impact is shown in one model 1. Another important factor causing child labourer is large their
family sizes. Household size has a strong positive relationship with child labour in model 2. With

16
large family size, income level is also increased as more children is the source of the their
income and to some extent solve financial problem. That is why poverty level also reduced to
some extent. When family size is becoming large, the big family cannot afford their necessities
of life including food, clothing, education and others and thus more children are sent to work in
the labour market. Parents below the poverty line cannot afford to send their children to schools,
where a child spends a lot of time and money on books and school fees, and ultimately he is
unable to get education. The parents of poor families thought that it is better for their children to
learn some skills and to their children would be able to earn more which adds in their incomes.
In table 4, per capita income increased child labour which is shown over results in both models
as the value of per capita income is positive for both models. This is special case of Pakistan, as
the per capita income is not enough for large poor families and child labours are increased in
number with little or no improvement in per capita income of Pakistan. For example, Per capita
income in Pakistan during 1990-91 was which is increased to 143.39 percent in 2005-06, which
is not very high as compared to other developing countries. One of the reason may be the high
population growth (3 percent per year) during 2005-06 in Pakistan. The analysis shows that
large family sizes and illiteracy the main causes of child labour in Pakistan.
An integrated approach may be formulated to education, skill training credit provision
and income-generation will help in addressing the problem of child labour. Education in
particular is a key strategy to combat child labour. The education offered must be effective, it
must be affordable, also a need to provide free basic education and also supplement the income
of the parents so that they can send the children to school. Adult education programmes must be
introduced which will also help to produce efficient and skilled child labour. Education may be
linked with skill training and provision of credit to attract the children and parents 3.
This brief statement summarizes the challenge Pakistan faces in eliminating its problem of child
labour. The millions of children who work to support their families after hazardous conditions
and cannot go to school due to so many reasons. If Pakistans leaders and policy makers are
serious about developing a strategy that seeks to end child labour, it must take a number of
factors into account. There is no one easy solution.
They must be aware of the scope of the problem by properly identifying Pakistans child
labour force. Although estimates very considerably, generally speaking, the number of

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Source: (May 26, 2008) YesPakistan.com Staff Writer.

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 only male working children in Pakistan is more than 19 million. This is four times
Singapores total population.
The leaders and policy makers must be aware of how prevalent child labour really is end
that it is usually not worked which is an obstacle to these children going to school. These
childrens families live in poverty and cannot afford to educate them.
Leaders and policy makers must realize that the education process in Pakistan has fuelled
the problem of child labour. The current challenge is to make all schooling cost-effective for the
government and more important poorer families attractive and relevant to the needs and
aspirations of working children and their families. With such a system in place, parents may not
only be able to afford schooling for their children, but they will very likely rethink the
opportunity cost of sending children to school versus work.

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