Chapter 6

Results and Discussion

6.1 Introduction
Several versions of child labor, child schooling and household poverty based on econometric
analysis are available in literature. However the use of some specific versions depends upon
the objectives of the study as well as the data available on parameters of basic concerns.
Therefore to analyze the models precisely three statistical techniques are used. Section 6.2
described the Statistical Analysis of Primary Data, 6.3 showed the Correlation Analysis and
section 6.4 explain the Econometric Analysis. All these are explain as follows

6.2 Statistical Analysis of Primary Data

E-views software was used to determine the statistical analysis of primary data for each
model. To have the clear idea about the structure of the variables, averages, standard
deviations, skewness and kurtosis are given in following table. Table contains six columns.
First contains the name of variables. The mean of the variables are reported in column 2;
column 3 is for median, while standard deviation of the variables is presented in the column
4 and skewness are presented in column 5 and 6 present kurtosis respectively.

6.2.1 Child Labor Model

Additional descriptive analysis of child labor model provides the comprehensive profile of
working children and its determinants. The following table indicates that the 40%
household’s children involve in labor activity and average age of working child is 11.78
years. The average passed education of working child is 4.3 its means that children left
school before completing primary standard of education. The average family size of
household in the sample is that about 9.4 percent. On the average about 73 percent
households children want to get school education and average age of households head is 43
years. Average per month income of households is Rs.28721 with a standard deviation
Rs.23510; similarly the other variables disclose the sample statistic and about 21 percent
households living below the poverty line.

Variables Mean Median Std. Dev Skewness Kurtosis

CL 0.400000 0.00 0.49112 0.4082 1.1666
AGE 11.7800 12.000 2.21951 -0.3431 2.9845
CSE 0.735000 1.000 0.4424 -1.0649 2.1341
EDU 4.30500 5.000 2.4804 -0.3158 2.1576
FS 9.4600 9.000 3.7252 1.0324 4.3019
HA 43.10000 42.00 7.5455 0.6208 3.3115
HMI 28721 18450 23510.97 1.7896 5.9365
PLS 0.2150 0.0000 0.4118 1.3874 2.9250
6.2.2 Child Schooling
The following table indicates that 98 percent household children are going to school. The
average education of households head is 5.7; it indicates that mostly household head are
primary pass. On the average about 73 percent household children want to get school
education. The average female male ratio is 1.5 and dependency ratio is 0.35. While the
average monthly income of household is Rs.28721 with the standard deviation Rs.23510.97,
similarly the other variables disclose the sample statistic.

Variables Mean Median Std. Dev Skewness Kurtosis

CS 0.98000 1.0000 0.1403 -6.8571 48.02
HHE 5.7800 5.0000 4.6873 0.0827 1.8368
CSE 0.7350 1.0000 0.4424 -1.0649 2.1341
FMR 1.5015 1.1500 1.1954 2.5138 11.4343
DR 0.3586 0.30000 0.1906 0.4584 3.2006
HMI 28721 18450 23510.97 1.7896 5.9365

6.2.3 Household Poverty Model

The following table indicates that mean of total personal expenses (TPE) of households is
Rs.11296.7 with the standard deviation Rs.10498.72. The 22 percent households are living
below the poverty line. The average per capita income (PCI) of households is Rs.3241.2 with
the standard deviation Rs.3334.16. The average number of working person (NOHWP) in a
household is 2.5. The average of households received non-labor (HRNLI) from relatives or
Govt. is 38 percent. About 32 percent poor households bought necessary goods daily
(HBGD) and 40 percent household children involved in labor activity. The following table
also shows that household engaged in outside work about 8 to 9 hours.

Variables Mean Median Std. Dev Skewness Kurtosis

TPE 11296.7 7700.0 10498.72 2.3240 10.66
PLS 0.21500 0.000 0.4118 1.3874 2.9250
PCI 3241.205 2354.0 3334.16 6.3605 62.2668
NOHWP 2.51500 2.0000 1.5530 1.0250 3.4252
HRNLI 0.38000 0.0000 0.4866 0.4945 1.2444
HBGD 0.32000 0.0000 0.4676 0.7717 1.5955
HOHWH 8.7250 9.000 2.3658 -0.1239 2.2999

6.3 Correlation Analysis

Correlation shows the degree of association between dependent and two or more
independent variables. The following correlation matrix describes degree of
 interdependence between pairs of variables. To explore the association between variables
we use a criterion which is explained in chapter 4.

6.3.1 Child Labor Model

If we analyze the results of the correlation coefficient in terms of child labor, correlation
coefficient describes the extent of the relationship between child labor and independent
variables. Here we start one by one analysis of coefficients: child labor activity weak positive
associated with household poverty (PLS), children labor activity moderate positively related
with age of working children (AGE) which means that as the children grow old labor activity
increases. Children want school education (CSE) weak negatively related with child labor,
showing that more children want to get school education less will be the child labor.
Obtained education (EDU) of working children weak negatively related with child labor.
Household family size (FS) did not influence child labor activity, both variables does not
impact each other. Household head age (HA) weak positive related with child labor. While
household monthly income very weak positive related with children labor activity.

CL PLS Age EDU CSE HA FS HMI

CL 1.000000
PLS 0.2434 1.000000
Age 0.403831 0.07399 1.000000
EDU -0.36052 -0.1284 0.354533 1.00000
CSE -0.24975 0.01089 -0.12107 0.197647 1.00000
HA 0.245439 0.07066 0.316378 -0.074935 -0.019522 1.00000
FS 0.066467 0.06622 0.023241 -0.006558 0.181039 0.200903 1.00000
HMI 0.132656 -0.03077 0.118777 0.043697 0.018074 0.194286 0.438411 1.000000

6.3.2 Child Schooling

The following table reveals that household monthly income (HMI), dependency ratio (DR)
and female male ratio (FMR) are not correlated with child schooling so, they does not
influence child schooling. While households Head education (HHE), children want school
education (CSE) very weak positive correlated with child schooling.

CS FMR HHE CSE DR HMI

CS 1.0000
FMR -0.0297 1.0000
HHE 0.1384 0.0212 1.0000
CSE 0.1569 0.0140 0.1122 1.0000
DR -0.0310 0.1231 0.1558 0.1123 1.0000
HMI 0.0470 -0.1205 0.0603 0.0180 -0.1446 1.0000
6.3.3 Household Poverty Model
The correlation coefficient of total personal expenses of household (TPE) and per capita
income (PCI) weak negatively related with household poverty line status which shows that
higher the total personal expenses lower will be households faced poverty, similarly higher
per capita income means that lower the number of household’s lies below the poverty line.
The number of household working person (NOHWP) and children labor activity (CL) weak
positively related with household poverty line status which means that higher the number
of working person in a households more chances to fall below the poverty line status. There
are two reasons behind this phenomena first all working person involve in same family
business so, they have no personal income, second more personal spending of working
person left less income of other family members so, they remain under the shadow of
poverty and third all working person work against low wage rates. Household received non-
labor income (HRNLI) very weak positive correlated with household poverty line status. The
coefficient of household bought grocery daily (HBGD) not correlated with household poverty
line status. Household outside home working hours (HOHWH) weak negatively related with
household poverty line status which means that as the outside home working hours
increase household poverty decrease.

PLS HBGD HOHWH HRNLI NOHWP PCI TPE

PLS 1.0000
HBGD 0.0323 1.0000
HOHWH -0.2484 -0.0018 1.0000
HRNLI 0.1920 0.0812 0.0082 1.0000
NOHWP 0.2659 0.0279 -0.1910 0.0389 1.0000
PCI -0.2323 -0.0286 -0.0691 -0.0442 0.3086 1.0000
TPE -0.2152 -0.0446 0.0989 0.0321 0.4144 0.4313 1.0000

6.4 Empirical Analysis

The results in this chapter are discussed in the light of hypothesis formulated in chapter 4.
The following tables are interprets the Logit estimates of child labor, child schooling and
household poverty model. Table contains five columns. First contains the name of variables.
The estimated parameters of the variables are reported in column 2; column 3 is for
standard error of the coefficients, while asymptotic Z-statistic of the parameters of the
explanatory variables is presented in the column 4 and probability values are presented in
column 5 respectively. While this study used two tailed test of significance or z-statistics for
determining the acceptance or rejection of null hypothesis in order to check the reliability of
the point estimates.
6.4.1 Child Labor Model
The logistic estimates of child labor model are given below. Where the head age, head age
square, working children age, working children education in completed years, children want
school education, family size, household poverty line status and log of household monthly
income are taken as independent variables and child labor is used as the dependent
variable.

Variables Coefficient Std. Error Z- Statistics P- Values

C -34.278 8.5929 -3.9891 0.0001
HA 0.9336 0.3127 2.9849 0.0028
HASQ -0.0107 0.0034 -3.1161 0.0018
AGE 1.250 0.2159 5.7929 0.0000
EDU -1.0451 0.1791 -5.8348 0.0000
CSE -0.6387 0.5351 -1.1935 0.2326
FS 0.0919 0.0785 1.1709 0.2416
LHMI 0.3231 0.4048 0.7980 0.4248
PLS 1.0612 0.6065 1.7497 0.0802
Log Likelihood = -65.70 Sample Size = 200
LR Statistics = 137.80 Probability (LR Statistics) = 0.0000
McFadden R-Squared = 0.511

The result of the constant term shows that the effect of intercept term on child labor is
more important. The value of McFadden R 2 which assures the quality of our estimates
shows that about 51 percent variations in the model are due to explanatory variables.

With this arbitrary choice, it is observed that the head age (HA) of households is explaining
child labor positively. The coefficient of head age is highly significant. It means that as the
age of household increases child labor also increases. This can be seen as the age of
household head increase working capacity declining after the certain age and it is difficult
for him to bear all financial affairs of his household that why they allow their children to
participate in labor market. In the sample study mean age of household head is 43 years.
The estimation of head age variable is indirectly reconciled with the result of Togunde and
Richardson (2006).

The coefficient of head age square has negative and significant impact on child labor.
Children of upper age household head more involve in labor activity while children of lower
age household head less involve in labor activity. The same result is found by Khan (2003).

Estimation of the model describes that age of child has positive and highly significant impact
on child labor. As the age of working child increases, its impact becomes highly significant
and the value of coefficient also increases. The statistic describes that 1 year increase in
child age increase 1.0 1 percent chances of child involvement in labor activity. The estimate
of child age variable reconciled with the results of Blunch and Verner (2000), Admassie
(2003), Aldaba et al. (2004), Dayioglu, Togunde and Richardson (2006), Hou (2009), Ahmad
(2012), Webbink et al., Onyemauwa and W.A and T.N (2013).

The variable EDU represent the past education standard of working children in years and is
introduced in the model to see whether child past education influenced child labor or not.
The variable is highly significant having negative association with the child labor. The
coefficient of the variable indicates that 1 percent increase in child education decrease 1.09
percent child involvement in labor force participation. The estimate child education variable
is also consistent with the results of Amin et al. (2006).

No one can observe the child interest in school education in many society, therefore to see
the impact of children want school education variable included in the model for determine
child labor decision. The coefficient for this variable is negative and insignificant. It describes
that more child want to obtain school education fewer would be children involve in labor
force participation. This result indicates that 1 percent change in children interest decreased
child labor 0.59 percent.

It is observed that the family size (FS) of household is explaining child labor positively. The
coefficient of household family size is significant. The coefficient of the variable has positive
association with the child labor decision. This reveals that children belonging to a large
family increase the probability to participate in labor market. This result indicates that 1
percent increase in family size increase child labor 0.13 percent. The estimate of household
family size variable reconciled with the results of Qureshi et al. (2014), Ahmad (2012),
Togunde and Richardson (2006) and Toor (2005).

The coefficient of log of household monthly income (LHMI) has positive sign and
insignificant. Higher income of household leads more children involved in labor activity. In
developing countries low or uneducated parents less wants to invest in children education
so, their children more involve in labor activity. The results of this variable also satisfy the
wealth paradox (i-e as the household become wealthier start child labor increases). The
estimate of log of household monthly income reconciled with the results of Lima et al.
(2015) and Abdullahi et al. (2016).

The variable of PLS represent the household poverty line status and is included in the model
to see whether household poverty effected child labor or not. The variable is significant and
has positive association with child labor. The coefficient of the variable indicates that 1
percent increase in household poverty increase 1.06 percent chances of children to involve
in labor activity. The estimate of household poverty variable consistent with the results of
Blunch and Verner, Ray (2000), Aldaba et al. (2004), Ersado (2005), Hou, Kim (2009),
Onyemauwa et al. (2013) and Qureshi et al. (2014).
6.4.2 Child Schooling Model
The logistic estimates of child schooling model are given below. Where the female male
ratio, dependency ratio, household head education, log of household monthly income and
children want school education are taken as independent variables and child schooling is
used as the dependent variable.

Variables Coefficient Std. Error Z- Statistics P - Value

C -5.6104 9.7656 -0.5745 0.5656
FMR -0.2365 0.4275 -0.5532 0.5801
HHE 0.3790 0.2253 1.6822 0.0925
CSE 2.4419 1.2420 1.9660 0.0493
LHMI 0.8521 0.9563 0.8909 0.3729
DR -2.0458 2.6360 -0.7760 0.4377
Log Likelihood = -14.3989 Sample Size = 200
LR Statistics = 10.4178 Probability (LR Statistics) = 0.06422
McFadden R-Squared = 0.2656

The result of constant term shows that the effect of intercept term on child schooling is less
important. The value of McFadden R 2 which assures the quality of our estimates shows that
only 26 percent variations in the model are due to explanatory variables.

Keeping in mind the importance of gender discrimination in developing countries like

Pakistan, a variable FMR, and female male ratio included in the child schooling model. The
estimated result is as, as was expected in the hypothesis. The result is insignificant and has
negative value. The statistic shows that female male ratio decline child schooling. The
coefficient of the variable indicates that 0.23 percent decline in child schooling is due to 1
percent increment in female member.

Estimation of child schooling model describes that household head education has positive
and significant impact on child schooling. More educated household head is in favor of more
children schooling than less educated household head. It describe that household head
education significantly increases child schooling. The result indicates that 1 percent
increases in head education increases child schooling 0.37 percent. The estimate of
household head education variable reconciled with the results of Berenger and Chouchan
(2015), Onyemauwa et al. (2013), Grigoli and Sbrana (2011), Khan (2003), Shapiro and
Tambashe (2001), Ray (2000) and Jensen and Nielsen (1997).

No one can ignore the child interest in school education in any society, therefore to see the
impact of children want school education variable included in the model for determine child
schooling. The coefficient for this variable is positive and significant. It describes that more
child want to obtain school education greater would be child schooling. This result indicates
that 1 percent change in children interest increased child schooling 2.4 percent.

An important variable in the model is log of household monthly income. Log of household
monthly income has a positive coefficient with insignificant value. The sign of the variable is
positive indicating that if the household income increases they will be prefer more children
schooling. The estimated results of the variable contradict with wealth paradox (i-e as the
household become wealthier they will prefer less child schooling) presented by Lima et al.
(2015) and Abdullahi et al. (2016).

The variable dependency ratio (DR) of household indicates the position of household
economically active and non-active person. The coefficient of this variable is also according
to expectation showing negative impact of dependency ratio on child schooling. This result
describes that fewer presence of economically active person in household decreases child
schooling, however this result is insignificant.

6.4.3 Household Poverty Model

The logistic estimates of household poverty model are given below. Where the household
bought grocery daily, per capita income, number of household working person, household
received non-labor income, total personal expenses, household outside home working
hours and child labor are taken as independent variables and household poverty line status
is used as the dependent variable.

Variables Coefficient Std. Error Z- Statistics P –Value

C 0.9518 1.066 0.8923 0.3722
HBGD 0.0776 0.5100 0.1523 0.8789
PCI -0.0013 0.00031 -4.4701 0.0000
NOHWP 1.2048 0.2310 5.2154 0.0000
HRNLI 1.0507 0.5016 2.0947 0.0362
TPE -0.00014 4.80E-05 -2.9933 0.0028
HOHWH -0.17762 0.1061 -1.6731 0.0943
Log Likelihood = -55.72 Sample Size = 200
LR Statistics = 96.75 Probability (LR Statistics) = 0.00000
McFadden R-Squared = 0.46

The result of constant term shows that the effect of intercept term on household poverty is
less important. The value of McFadden R 2 which assures the quality of our estimates shows
that only 46 percent variations in the model are due to explanatory variables.

In this model we hypothesized that household living below the poverty line mostly they are
working on daily wages so, they bought grocery or necessary goods daily, the estimated
result is as, as was expected in the hypothesis. The result is insignificant and coefficient has
positive value. The positive sign of the variable indicating that if household become poorer,
they will more buy necessary goods daily. The coefficient of the variable indicates that 0.07
percent increment in household poverty due to 1 percent change in household bought
necessary goods daily.

Per capita income of household is another important variable of household poverty model.
The results of the model state highly significant negative impact on household poverty. The
statistic describes that 1 percent decline in per capita income increase poverty 0.0013
percent.

Another important variable is number of household working person, the coefficient sign of
this variable against the expectation showing positive impact on household poverty. But
positivity of the coefficient may be due to that reasons, that mostly working persons
involved in same family business and their participation not changed the productivity and
hence income level, more personal spending of household working person left fewer
income for other members. The results of the model state highly significant positive impact
of household working person on poverty.

Household received non-labor income is another important determinant of household

poverty model. The coefficient sign of this variable is positive and significant. The sign of this
variable is indicating that an increment in household poverty leads the 1.05 percent
attainment of non-labor income. From this result it can be concluded that household
poverty line status positively related with household received non-labor income and same
result is found as was expected.

A total personal expense of household member is another determinant of household

poverty. The results of the model significant and negative impact on household poverty line
status. The statistic describes that if a household fewer personal expense, this increase the
household poverty. A decrease in household personal expense 1 percent increase poverty
0.00014 percent. This is seems to be negligible impact on household poverty.

Keeping in mind the importance of household members outside home working hours, a
variable HOHWH, average outside home working hours included in the model. The
estimated result is as, as was expected in the hypothesis. The statistic shows that the
increment in average outside home working hours decline household poverty. The result is
significant and coefficient has negative value. From this result it can be concluded that if
average household outside home working hours increased household poverty decreased.
The coefficient of the variable indicates that 0.19 percent decline in household poverty due
to 1 percent increase in household members outside home working hours.

In this model we hypothesized that child labor greater in poor households, the estimated
result is as, as was expected in the hypothesis. The result is insignificant and coefficient has
positive value. The positive sign of the variable indicates that if household become poorer;
they will prefer more child labor activity than child schooling.
6.5 Conclusion
In this chapter, there was analysis of the data with the help of descriptive statistics,
correlation matrix and econometric tools. After that there were explanations of the
determinants of each model. Then there were estimation of the models of child labor, child
schooling and household poverty and interpretation of the selected variables.