Child Labor and Unemployment: a Tale of Two Associations in Urban and Rural Areas in Iran

This study investigates the association between the unemployment rate and child labor among 30 Iranian provinces. In the absence of official data on child labor as a ubiquitous phenomenon, especially in developing countries, this study extracted official figures of child labor at the province level using the population and housing census data from the Statistical Centre of Iran. Controlling real GDP per capita, income inequality, and inflation rate, the results of panel data models (for boys and girls in rural and urban areas) indicate that unemployment is more severely and adversely related to child labor in rural areas. In contrast, it is positively and less strictly associated with child labor in urban areas. This result implies that while children work as complementary to their parents in the same workplaces in villages, they can substitute their parents in the cities' labor market. Moreover, the complementary of child labor for the adult labor force in rural areas is higher than its substitutability in urban areas, in absolute terms. Finally, irrespective of residence, boys' child labor is more responsive to the unemployment rate than girls, in absolute value.