Nutritional efficiency wage of child labour: theory and policy implication

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This research presents a theoretical model of nutritional efficiency wage of child labour that the productivity of child labour is determined by the level of consumption in childhood and firms employing the child labour decide the nutritional efficiency wage depending on the nutritional level of children. In this model, the family income depending on the adult human capital is a key component because the family income affects the productivity of child labour over the allocation for the consumption. It implies that the nutritional efficiency wage of child labour is low when the family income is low level. In addition, we present the dynamic analysis of the human capital. Child education for human capital is low level at the low family income because the nutritional efficiency wage of child labour is low and labour demand of child labour is high. As a result, the human capital of children is low level. Thus, we show that the possibility of a poverty trap with a low human capital level.