CHILD LABOR AND THE EDUCATION OF A SOCIETY

This paper analyzes policies by means of which a whole society in all initial state of illiteracy and low productivity call raise itself into a condition of continuous growth. Using an overlapping generations model in which human capital is formed through child rearing and Formal education. we show that an escape from a poverty trap, in which children work full time and no human capital accumulation takes place, is possible through compulsory education or programs of taxes and transfers. If school attendance is unenforceable, temporary inequality is unavoidable if the society is to escape in finite time. but long-run inequalities are avoidable provided Sufficiently heavy. but temporary, taxes call be imposed oil the better off. Prograrns that aim simply at high attendance rates in the present call be strongly nonoptimal.