Skip to main content


Log in

The effect of parental labor supply on child schooling: evidence from trade liberalization in India

  • Published:
Review of Economics of the Household Aims and scope Submit manuscript


This paper estimates the effect of changes in maternal and paternal labor supply on the schooling rates of children in India using the variation in industry-specific tariffs during a period of trade liberalization. The results show that an increase in maternal labor supplied outside of the household leads to a higher schooling probability for younger children. Specifically, a 1 day per week increase in maternal labor supply is associated with an approximately 5 % points increase in the schooling probability for children between the ages of 7 and 10. However, father’s labor supply has an insignificant effect on child schooling across all specifications. The effect for older children between the ages of 11 and 14, who face a tradeoff between schooling, market work, and domestic work, is also found to be insignificant.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Similar content being viewed by others


  1. Unitary household models that assume income pooling and a representative household utility function have generally been rejected by the empirical evidence (Browning and Chiappori 1998; Chiappori 2011; Duflo 2003; Duflo and Udry 2001; Pitt et al. 1990; Quisumbing and Maluccio 2003; Thomas 1991).

  2. If maternal and paternal labor supplies are perfect substitutes, the reduction in a mother’s labor supply may be balanced by a proportional increase in a father’s labor supply. In this case, we should see a positive effect for the father (Lundberg and Rose 2000 and 2002).

  3. Child quality and quantity are measured in real numbers.

  4. The above result represents the substitution effect and rules out the income effect due to quasi-linear preferences.

  5. In addition to the quinquennial surveys based on thick samples, the NSS Organization also implements additional surveys between the successive quinquennial rounds that are based on much smaller thin samples.

  6. The types of activities include: working in a household enterprise as an own account worker, employer, or unpaid family worker; working as a regular salaried/wage employee; working as a casual wage laborer in public works or in other types of work; attending an educational institution; attending to domestic duties; and engaging in the free collection of goods for household use.

  7. We exclude multiple family households, as the interaction between different families within these households may alter the child outcomes. We also exclude households in which one of the parents is absent.

  8. Similar results were shown for rural North India by Kis-Katos (2012).

  9. Although some children are reported to attend school at ages 5 or 6, we do not include this age group in our analysis, as a significant proportion of these children are attending pre-school from which some parents may opt out even when they have strong preferences towards education.

  10. The NSS reports labor supply as the number of days in a week, which we use throughout this study. One could multiply these numbers by the usual work hours per day in India, in order to represent the results in hours instead of days.

  11. For example, the industrial category “cotton textiles” includes both machinery and chemicals as inputs. The average tariff rate for this industry is therefore composed of tariffs in finished products as well as these inputs. Because each round of the survey data reports a different version of the NIC classifications, the concordance tables are used in order to make these classifications consistent across rounds.

  12. Specifically, we use the 1986 tariffs for the 43rd round, and the 1998 tariffs for the 55th round. The 1986 tariff rates are extrapolated using the percentage reduction between 1988 and 1989. Because the tariff rates remained constant prior to the trade liberalization in 1991, there was little to no change over this time period. We additionally used the 1- and 3-year lags and found that they provide similar results.

  13. The results from censored Tobit model turned out to be very similar to the Heckman model. In this paper, the Heckman model is preferred, as it provides a more flexible framework to account for selection in the subsequent analysis.

  14. While Glick and Sahn (1998) used assets and non-labor household income as instruments, they suggest prices as plausible instruments as well. Tariff rates are strongly linked to domestic prices through cost minimization, as suggested by the tariff pass-through literature.

  15. While the tariffs in all industries were significantly reduced, India maintained the non-tariff trade barriers until late 1998 for certain consumption such as rice wheat and oilseeds (Panagariya 1999). Tariffs for these products were nonbinding until these barriers were removed. In order to assess the importance of these restrictions, we set the tariff changes for agricultural commodities between 1988 and 2000 equal to zero, and re-estimate our model. The results suggest that the coefficients are robust to this modification.

  16. The details of these estimation results, as well as the descriptive analysis of the gender composition instruments, can be found in the working paper version of this study, which is available at


  • Anderson, S., & Eswaran, M. (2009). What determines female autonomy? Evidence from Bangladesh. Journal of Development Economics, 90(2), 179–191.

    Article  Google Scholar 

  • Angrist, J. D., & Evans, W. N. (1998). Children and their parent’s labor supply: Evidence from exogenous variation in family size. American Economic Review, 88(3), 450–477.

    Google Scholar 

  • Becker, G. S. (1985). Human capital, effort and the sexual division of labor. Journal of Labor Economics, 3(1), 33–58.

    Article  Google Scholar 

  • Besley, T., & Burgess, R. (2004). Can labor regulation hinder economic performance? Evidence from India. Quarterly Journal of Economics, 119(1), 91–134.

    Article  Google Scholar 

  • Bishwanath, G. (2002). Trade liberalization and manufacturing employment: The case of india. International Labor Organization, Employment Paper, No: 2002/34.

  • Browning, M., & Chiappori, P. A. (1998). Efficient intra-household allocation: A general characterization and empirical tests. Econometrica, 66(6), 1241–1278.

    Google Scholar 

  • Chiappori, P.-A. (2011). Collective labor supply with many consumption goods. Review of Economics of the Household, 9(2), 207–220.

    Article  Google Scholar 

  • Do, Q.-T., Levchenko, A. A., & Raddatz, C. (2012). Comparative advantage, international trade, and fertility. University of Michigan, Discussion Paper Series No: 624.

  • Duflo, E. (2003). Grandmothers and granddaughters: Old age pension and intra-household allocation in South Africa. World Bank Economic Review, 17(1), 1–25.

    Article  Google Scholar 

  • Duflo, E., & Udry, C. (2001). Intra-household resource allocation in Cte d’Ivore: Social norms, separate accounts and consumption choices. NBER Working Paper Series, No:10498.

  • Edmonds, E., Pavcnik, N., & Topalova, P. (2011). Trade adjustment and human capital investments: Evidence from Indian tariff reform. American Economic Journal: Applied Economics, 2(4), 42–75.

    Article  Google Scholar 

  • Felbermayr, G., Prat, J., & Schmerer, H.-J. (2008). Globalization and labor market outcomes: Wage bargaining, search frictions, and firm heterogeneity. IZA Discussion Papers, No: 3363.

  • Fontana, M., & Wood, A. (2000). Modeling the effects of trade on women, at work and at home. World Development, 28(7), 1173–1190.

    Article  Google Scholar 

  • Gleason, S. (2003). Publicly provided goods and intrafamily resource allocation: Female child survival in india. Review of Development Economics, 7(1), 71–85.

    Google Scholar 

  • Glick, P., & Sahn, D. (1998). Maternal labor supply and child nutrition in West Africa. Oxford Bulletin of Economics and Statistics, 60(3), 325–355.

    Article  Google Scholar 

  • Hasan, R., Mitra, D., & Ramaswamy, K. V. (2007). Trade reforms, labor regulations, and labor-demand elasticities: Empirical evidence from India. Review of Economics and Statistics, 89(3), 466–481.

    Article  Google Scholar 

  • Hasan, R., Mitra, D., Ranjan, P., & Ashan, R. (2012). Trade liberalization and unemployment: Evidence from Indian States. Journal of Development Economics, 97(2), 269–280.

    Article  Google Scholar 

  • Heckman, J. (1979). Sample selection bias and specification error. Econometrica, 47(1), 153–61.

    Article  Google Scholar 

  • Khandelwal, A., & Topalova, P. (2010). Trade liberalization and productivity: The case of India. Review of Economics and Statistics, 93(3), 995–1009.

    Google Scholar 

  • Kim, J., & Arnestein, A. (2006). Fertility and Its consequence on family labor supply. IZA Discussion Paper Series, No: 2162.

  • Kis-Katos, K. (2012). Gender differences in work-schooling decisions in rural North India. Review of Economics of the Household, 10(4), 491–519.

    Article  Google Scholar 

  • Kumar, U., & Mishra, P. (2008). Trade liberalization and wage inequality: Evidence from India. Review of Development Economics, 12(2), 291–311.

    Article  Google Scholar 

  • Lam, D., Duryea, S. (1999). Effects of schooling on fertility, labor supply, and investments in children, with evidence from Brazil. Journal of Human Resources, 34(1), 160–192.

    Article  Google Scholar 

  • Lee, J. (2008). Sibling size and investment in children’s education: An Asian instrument. Journal of Population Economics, 21(4), 855–875.

    Article  Google Scholar 

  • Lundberg, S., & Rose, E. (2000). Parenthood and the earnings of married men and women. Labour Economics, 7(6), 689–710.

    Article  Google Scholar 

  • Lundberg, S., & Rose, E. (2002). The effects of sons and daughters on men’s labor supply and wages. Review of Economics and Statistics, 84(2), 251–268.

    Article  Google Scholar 

  • Mammen, K., & Paxon, C. (2000). Women’s work and economic development. Journal of Economic Perspectives, 14(4), 141–164.

    Article  Google Scholar 

  • Panagariya, A. (1999). The WTO trade policy review of India, 1998. The World Economy, 22(6), 799–824.

    Article  Google Scholar 

  • Pitt, M., Rosenzweig, M. R., & Hasan, N. (1990) Productivity, health and inequality in the intrahousehold distribution of food in low income countries. American Economic Review, 80(5), 1139–1156.

    Google Scholar 

  • Quisumbing, A., & Maluccio, J. (2003). Resources at marriage and intrahousehold allocation: Evidence from Bangladesh, Ethiopia, Indonesia and South Africa. Oxford Bulletin of Economics and Statistics, 65(3), 283–327.

    Article  Google Scholar 

  • Rees, R., & Riezman, R. (2012). Globalization, gender and growth. Review of Income and Wealth, 58(1), 107–117.

    Article  Google Scholar 

  • Standing, G. (1999). Global feminization through flexible labor: A theme revisited. World Development, 27(3), 583–602.

    Google Scholar 

  • Suare, P., & Zoabi, H. (2009). Effects of trade on female labor force participation. Swiss National Bank Working Paper Series vol. 27, no. 3, 2009–2012.

    Google Scholar 

  • Thomas, D. (1991). Intra-household resource allocation: An inferential approach. Journal of Human Resources, 25(4), 635–664.

    Article  Google Scholar 

Download references


We thank two anonymous referees and the editorial team for their valuable comments and suggestions. We would also like to thank the participants of the Midwest International Trade Meetings at Penn State University, the CESifo Area Conference on Global Economy in Munich, the University of New South Wales, and the CEA meetings at Quebec City, especially Peter Egger and Ana Dammert, for their comments on an earlier version of this paper, and Alausa Waleem for his excellent research assistance.

Author information

Authors and Affiliations


Corresponding author

Correspondence to Beyza Ural Marchand.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Ural Marchand, B., Rees, R. & Riezman, R. The effect of parental labor supply on child schooling: evidence from trade liberalization in India. Rev Econ Household 11, 151–173 (2013).

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI:


JEL Classification