Can a positive income shock generate a poverty trap? Commodities and child labor

DOI:  https://doi.org/10.12804/revistas.urosario.edu.co/economia/a.5242

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Issue: Vol. 19 No. 1 (2016): enero-junio
Section Articles


Keywords: poverty traps , mining , child labor , natural resources , education , savings , economic growth trampas de pobreza , minería , trabajo infantil , recursos naturales , educación , crecimiento. Armadilhas de pobreza , mineração , trabalho infantil , recursos naturais , educação , crescimento

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Authors

Hernando Zuleta
Juliana Roa
Abstract

We present a theoretical model in order to study the causal relation between commodity prices and poverty traps. Using an overlapping generation’s framework where savings, education, fertility and child labor are endogenous variables we find four central results: 1) High commodity prices may generate poverty traps. 2) Given commodity prices, high labor productivity in the production of human capital reduces the likelihood of a poverty trap. 3) When there is child labor, the growth rate of human capital negatively depends on the commodity prices. 4) Child labor may lead to a decrease in both physical and human capital. 

How to Cite
Zuleta, H., & Roa, J. (2016). Can a positive income shock generate a poverty trap? Commodities and child labor. Revista Economía Del Rosario, 19(1), 85–115. https://doi.org/10.12804/revistas.urosario.edu.co/economia/a.5242
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