RANDOM WALK ECONOMICS RENDEZVOUS

April 2nd-3rd, 2011, LAHORE UNIVERSITY OF MANAGEMENT SCIENCES, LAHORE

Conference Theme: Achieving the Millennium Development Goal of universal education Session Theme: Child Labour And Schooling Title of the paper: Achieving Education for All and Eliminating Child Labour are Inter-related Objectives Attempts to Achieve One Without Addressing the Other are Unlikely to be Successful Authors: Talha Waheed Abuzar Ali University: LUMS Abstract Child labour and education are inter related. Child labour cannot be associated with successful education. Empirically it has been proved that children employment and education are negatively correlated. Since there are huge numbers of child labours in Pakistan, so child laour is one of the major explanantions of the slow progress of the Millennium Development Goal of Universal Education (Goal # 2 of MDGs) in Pakistan. Therefore, in order to accelerate the progress of this goal, policies aimed at educational improvement should be accompanied by policies aimed at ending child labour.
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Achieving Education for All and Eliminating Child Labour are Interrelated Objectives Attempts to Achieve One Without Addressing the Other are Unlikely to be Successful

Introduction:
The educational consequences of child labour have been empirically proved. It has been shown that involvement in child labour is associated with greater difficulty in attending and persisting in school, and with greater difficulty in terms of learning effectively in the classroom (J o i n i n g f o r c e s a g a i n s t c h i l d l a b o u r ). For instance, the given below graph shows a negative correlation between childrens employment and school attendance.

Source: J o i n i n g f o r c e s a g a i n s t c h i l d l a b o u r Report 2010

Why the case of child labour is important for Pakistan? It is important because the prevalence of child labour in Asia-Pacific region, especially in South Asia, amounts to almost half of the total child labours in the world while sub-Saharan Africa has the largest proportion of working children: nearly one-third of children age 14 and under (48 million children). So sub Saharan Africa and South Asia have the most number of child labours in the world (The State of Pakistan Children 2009, chapter 7 on child labour). As a result of this prevalence of child labour in these two regions, a negative effect on schooling is evident in the MDGs report 2010. Sub Saharan Africa and Southern Asia are home to the vast majority of children out of school; in 2008, 46% of children in world out of school were from Sub Saharan region while 27% were from Southern Asia (MDGs Report 2010)-Figure 1. In short, since Pakistan lies in South Asia a region hit with 2

many social epidemics, including child labour - so it makes sense to say that the effect of child labour on education is very severe. And in order to address the issue of education, the issue of child labour should be given importance as well in order to devise effective educational policies (J o i n i n g f o r c e s a g a i n s t c h i l d l a b o u r ).

Causes of Child Labour:

Now that it has been established that child labour and education are negatively linked, I am going to discuss why child labour occurs. There are many universal causes of child labour and some specific causes of child labour for specific countries. Some universal reasons of child labour include poverty, rural urban gap (inequality), social-cultural norms, armed conflicts, mass migrations, etc. and due to these reasons education suffers. For instance, the given below figure shows that children from poor families are more likely to be out of school (as most of these children are involved in child labour) as compared to children from rich families. Also since the largest sector for child labour is agriculture (ACCELERATING ACTION AGAINST CHILD LABOUR), so we can guess that education in agricultural areas or rural areas is much lower than urban areas. And the same figure below will prove that our guess was right; rural children are TWICE as likely to be out of school as children living in urban areas (MDGs Report 2010). In other words, the problems giving rise to child labour ultimately translates into the negative effect on the education sector.

Source: MDGs Report 2010

In case of Pakistan, one of the reasons for slow progress of MDGs in the 1998 nuclear test. Even before the MDGs were launched, Pakistan was in an already economic crisis. In the late 90s India successfully formed and tested their nuclear weapons, Pakistan followed suit in 1998 given the potential threats from its neighboring country and their depleting diplomatic relations. As a result international condemnation and protest initiated in response to Pakistans formation as a nuclear power. Many countries broke of friendly ties with Pakistan and put up sanctions against it in revolt. This triggered an economic crisis in Pakistan as foreign investment, international trade and growth slumped, that too at a time when Pakistan was spending millions of dollars in the development of weapons of mass destruction. An overwhelming USD 3.16 billion (approximately) was Pakistans total military expenditure in the fiscal year 97/98, which accounted for about 29 percent of that years budget. This along with the economic slowdown drove Pakistan into an immense cycle of poverty; the aftermath of which resulted in rising unemployment, lower wages, as well as increasing inflation and cost of living manifolds. Therefore an increasing number of families could no longer afford to send their children to school and rather put them to lower paid labor-oriented jobs so that they could also contribute towards the fulfillment of the familys basic needs. And ever since then child labor has become a continuously worsening sight for Pakistans government and its economy, something which hasnt been tackled as yet (Annual Report on Military Expenditures, 1998). Another reason of child labour is the lack of low cost educational opportunities. Especially in case of Pakistan, the commercialization of education is having a very negative effect on child labour. Private school system has become a common business all across Pakistan, especially in urban cities like Islamabad, Lahore and Karachi. Known for their high quality of education these schools target only the elite sector of the entire market and hence are more of a niche good. With aggregate incomes of no more than $30/month for families living below the poverty line, and with private schools charging about $100/month for each student, there is certainly no possibility for an underprivileged child to attend high quality education. Hence explaining the low net enrolment; even if some lower middle class families do provide their children with private education, the young child goes through inferiority complexes and is discouraged to attend school, which again does no improvement towards the drop out ratio (Economic Survey of Pakistan, 2008)

Main Theme of the Paper:

The main purpose of this paper is to explain why Pakistans progress in the achievement of Millennium Development Goal of Universal Education (Goal # 2) is not up to the 4

mark and how can we accelerate the rate of progress of this goal. More specifically, this paper explains why child labour is strongly linked with the slow rate of the progress of this goal and how can we improve the rate of progress of this goal by implementing policies that will decrease child labour or will decrease the effect of child labour.

Almost 40% of population of Pakistan is below the age of 15 (Pakistan Demographic Survey 2007). And almost 10 % of the children below age 15 are economically active on a full time basis. The actual numbers are MUCH MORE because it does not account for part time child labour or some informal child labour (The State of Pakistan Children 2009, chapter 7 on child labour). So ATLEAST 10% of school aged children are directly affected by child labour. I called it at least because a lot of school aged children from rural areas are employed in agriculture which is not a formal sector in most cases. Almost 66% of child labour in Pakistan is employed in agriculture sector (SPARC documentary). In short, even though the statistics about child labour in Pakistan are not reliable, but by consulting various sources we know that a large number of children in Pakistan are working as child labours. And since child labour affects schooling, as I have documented above, so we can confidently say that in Pakistan child labour has been a major obstacle in the way of the progress of Millennium Development Goal of Universal Education (Goal # 2) and one of the effective ways to increase the rate of this progress is to tackle child labour.

Policies to Accelerate the Progress of MDG of Universal Education:

So far the prevalence of child labour and its impacts on education has been discussed, now I talk about some policies that might help accelerate the achievement of MDG of Universal Education. In the beginning I had mentioned something that I am going to repeat again so that it might help us understand the two broad categories of my policies. Here is what I propose: Achieving Education for All and eliminating child labour are inter-related objectives attempts to achieve one without addressing the other are unlikely to be successful. (Hague Report 2010) Based on my proposition, I will divide my policies into policies related to education and policies related to child labour. There might be a little overlapping between the two policies because even though when I will be discussing educational policies, I will focus on those policies which are more related with working children.

Policies Related to Child Labour:

First of all, I will discuss policies related to tackle child labour. I will further divide the policies related to child labour into Short Run Policies (targeting Symptoms of Child Labour) and Long Run Policies (targeting Causes of Child Labour). Short term policies will be to provide immediate relief to poor families, lifting them up momentarily so that at least they took some initiative for their prosperity. The policies may include (a) Providing incentives to children and their families when they attend school and perform well in school. Incentives may include money, basic food items, free school uniform and books. (b) Micro-financing is an essential element that can contribute positively for the cause. Families struggling to make ends meet usually look for some type of loans that can help them get back at their feet by starting a business or otherwise; however formal banking and lending institutions never give out loans to such people since they barely have any assets to reach a collateral agreement. So there is need to establish micro-financing institutions that specialize in giving out loans to such households at very low interest rates with easy return policies. Examples Include Grameen bank (Yunus Center) (c) The government should provide funding to private schools so to subsidize tuition fee for underprivileged familys i.e. forming a private public partnership. This shall increase the net enrollment rate by reducing the divide between the rich and the poor, and making education more equitable. Currently a research is in progress to measure the effectiveness of this program in rural Sindh. The research is conducted by The Abdul Latif Jemeel Poverty Action Lab in MIT (Poverty Action Lab). Long Run Policies may include some of the following. (a)Social Businesses are an important source of engaging the poor families in some economic activity. With an initial investment, the business will eventually be self sufficient and will run through the economic activity of poor families. The most efficient way to decrease poverty would be to engage the poor themselves in the economic activity. Example of such business include the Grameen-Danone project in Bangladesh (Yunus Center) (b) Year after year the budget allocation focuses on aspects of military and defense and a very minimal 2.1 percent of GDP is spent on the education sector. What is even more important is that out of this 2.1 percent the majority is spent on higher education and very minimal amounts are left for primary education; the HEC (Higher education commission) receives 3 to 4 times more the amount that is issued to all other educational divisions (Ministry of Education). So in order to decrease poverty in long run, government must focus more on primary education. (c) Specific Monetary and Fiscal policies are to be developed with accordance of the aims. The above mentioned micro economic policy mainly highlights a need for the government to spend more on the required areas; however it can only do that if it has a large enough budget initially. For this purpose the government should impose a 6

progressive taxation system; take from the rich and give to the poor. Not only will this reduce inequity but will also decrease poverty and hence reduce child labor. Moreover, increase government expenditure and direct it towards industrial investment and the production of jobs. In terms of the monetary policy interest rates shall have to drop and money supply increased so to offer cheap loans and bring about a recovery in the countrys economy. Once investment and growth rises, employment will increase, poverty will fall and hence bring about a reduction in the need for child labor. Even though the suggested monetary policy shall bring about an increase in inflation but in the long run output will rise and hence the average price level will fall back.

Policies Related to Education:

The Millennium Development Goal of Universal Education (Goal # 2) is: Ensure that by 2015, children everywhere, boys and girls alike, will be able to complete a full course of primary schooling. This goal has three indicators: Net Primary Enrolment Ratio, Completion/Survival Rate 1 grade to 5, Literacy Rate. It is a pity that Pakistan lags behind in all the three indicators ( " P a k i s t a n M i l l e n n i u m D e v e l o p m e n t G o a l s R e p o r t - 2 0 1 0 " 3 2 - 4 0 ) . The first indicator talks about the SIZE of primary education sector while the other two indicators talk about the EFFICIENCY/QUALITY of Primary Education Sector. Also the main goal contains a phrase boys and girls alike, so the aim is also to ERADICATE GENDER BIAS in education. So overall this goal in MDGs has three main components. 1. Increase the total number of children in school 2. Improve the quality of education in schools 3. Give equal educational opportunities to boys and girls alike. So my policies related to education will naturally be divided into three sub categories. First of all we see how we can increase the Net Enrolment Rate (NER) of number of children in primary schools. Some possible policies may include: (a)Decrease the cost of primary education or it will be much better to make it free of cost. Government can do it by investing more in primary education by cutting costs from higher education (phd programs). There is an opportunity cost to that, but since the social optimal level of education is somewhere between primary and secondary (Todaro) and we also want to achieve the Universal Primary Education so it is worth while to decrease higher education budget a little and distribute it to primary education. In this way poor children who work can get a chance to get low cost quality education. (b)In areas where government schools are in shortage and government dont have enough budget to build more schools, it might be a good idea to subsidize private schools. By subsidizing private schools, now more children can get the same quality education at 7

private schools at low costs because government is subsidizing it. Every policy has its time period, and this is a short term policy not a long term policy but it will be helpful to increase the net pool of primary educated students. The effectives of these private public partnership is under research(Poverty Action Lab). Secondly, we would have to increase the quality of our schools. Though much is done and known about the increase in total number of children in schools, little is known about the actual learning outcomes of being in school. It is clear that getting admission in a school does not translate into literacy given the poor quality of our primary schools. Also it is much harder in case of child labours to learn properly even if they go to school. It has been empirically proved that child employment and drop out rates are positively correlated. The indicator # 2 of universal primary education goal is not up to the mark and one reason might be the high early drop out rates of child labours in school. The following graph explains it all.

Source: Hague Report 2010 Here are some polices to increase quality of education: (a)One policy to increase quality (i.e. decrease the drop out rate and increasing literacy) could be to pay special attention to child labours. Most probably they will be weak in their classes. These children should be given much more flexible time for schooling, so that there is lesser burden for them to work and learn. (b)Special contract teachers can be hired to teach students (especially child labours) lagging behind in class. The costs of these programs are very low, it is just the wage of the contract teachers that are hired. Also, young local women are hired as teachers and they are given a few weeks training before they start teaching. In this way this program is empowering women as well. It has been very effective in one of the studies of Poverty 8

Action Lab in India (Remedying Education: Evidence from Two Randomized Experiments in India). (c)The use of technology, like computer, can prove very efficient when there are a limited number of teachers. Low cost computers can be bought which are no longer used by most people, but these computers are good enough to run the video lectures or other educational programs. The children can see the lectures in their homes (very good for children who are working in rural areas in agriculture sector because it gives them that flexibility of time) and then only meet a few times with a teacher to discuss specific problems (Salman Khan, TED). Khan academy has a lot of free videos on basic school level mathematics that can be very helpful. It is being watched by a lot of students every where in the world. Even I sometimes see the videos of Calculus, Probability, Linear Algebra, etc (Khan Academy). Again this program has been a success in one of the SOCIAL experiments of Poverty Action Lab (Remedying Education: Evidence from Two Randomized Experiments in India).

Thirdly, some policies to decrease gender bias in education include. (a)We have to accept and respect the social and cultural norms of a society. Our educational system should not be such that people get offended and dont send their girls to get education. The best solution is to mould the education system in such a way that is acceptable to them. Economists cannot do this, we need anthropologists and sociologists who ought to understand the local cultures and traditions. (b)Once again, use of technology can be very useful to educate girls. Low cost computers are provided to them and they are asked to meet their teacher, who should be a woman as well, only a few times in a week.

Conclusion:
We have seen how child labour has been a barrier in the progress of MDG of Universal Education and we have seen that because of this inter-play between education and child labour individual policies targeting only education or child labour will not be as effective as when these policies are implemented together. So, based on all the arguments and data I have put forward in this paper I am able to show that child labour cannot be associated with successful education. But everything in this world is connected and the more diverse our researches are the better will be our policies. So there might be over generalizations in this paper or other technical problems but the effort has been made to get as much a holistic View of effect of child labour on education as possible. The research was made by keeping this quotation in mind:

If you understand something in only one way, then you don't really understand it at all. The secret of what anything means to us depends on how we've connected it to all other things we know. Well-connected representations let you turn ideas around in your mind, to envision things from many perspectives until you find one that works for you. And that's what we mean by thinking! (Marvin Minsky)

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Work Cited:
1. "Joining forces against child labour." Joining forces against child labour Inter-agency report for The Hague Global Child Labour Conference of 2010. International Labour Organization and Understanding Childrens Work (UCW) 2010: Geneva, 2010. 39-45. PDF. Available online at http://www.ilo.org/ipecinfo/product/viewProduct.do?productId=13333

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The State of Pakistan Children 2009,chapter 7 on child labour. Available online at http://www.sparcpk.org/publications/The_State_of_Pakistan%27s_Children_2009.php United Nations Millennium Development Goals Report 2010. Pages : 16-18. Available online at http://www.un.org/millenniumgoals/pdf/MDG%20Report%202010%20En%20r15%20low%20res%2020100615%20-.pdf#page=18 Accelerating Action Against Child Labour. International Labour Organization. Page:10. Available online at http://www.ilo.org/ipecinfo/product/viewProduct.do?productId=13853 Annual Report on Military Expenditures, 1998. Pakistan Economic Survey of Pakistan, 2008. Pakistan Demographic Survey, 2007. Federal Bureau of Statistics Documentary on Child Labour by Society for the Protection of the Rights of the Child. Available online at http://www.youtube.com/user/sparcpk#g/u Yunus Center, Bangladesh. Website: http://www.muhammadyunus.org/Social-Business/grameendanone/#

3.

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5. 6. 7. 8.

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10. Grameen Bank, Bangladesh. Website: http://www.grameen-info.org/ 11. Abdul Latif Jameel Poverty Action Lab, J-PAL. Massachusetts Institute of Technology. Website http://www.povertyactionlab.org/ 12. Ministry of Education, Pakistan. Budget information available online at http://www.moe.gov.pk/eduBudget.htm 13. P a k i s t a n . P a k i s t a n M i l l e n n i u m D e v e l o p m e n t G o a l s R e p o r t - 2 0 1 0 . Islamabad: , 2010. PDF. Pages :14, 32-40. http://undp.org.pk/images/publications/mdgr2010.pdf 14. T o d a r o , M i c h a e l , a n d S t e p h e n S m i t h . E c o n o m i c D e v e l o p m e n t . 4 1 6 - 4 1 9 . P r i n t .

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15. Remedying Education: Evidence from Two Randomized Experiments in India. Duflo, Banerjee. Available online at http://www.povertyactionlab.org/sites/default/files/publications/4_Duflo_Remedying_Education.p df 16. K h a n , S a l m a n . " L e t ' s u s e v i d e o t o r e i n v e n t e d u c a t i o n . " T E D . T a l k . 17. K h a n A c a d e m y R e s o u r c e s a v a i l a b l e o n l i n e a t http://www.khanacademy.org/ 18. Marvin Minsky quote can be found in book L e a r n M o r e S t u d y L e s s b y Y o u n g S c o t t

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