In many ways, this second reason is more important than the first. Americans who have never traveled beyond Europe are sometimes surprised to learn that items like labor unions, the 40 hour work week, and government-sponsored unemployment insurance are recent Western inventions. Most of the people in the world still live in agrarian societies much like the America of the 1820's and 30's. As in 19th Century America, people in most of today's agrarian societies face a life of physical labor as subsistence farmers. Crops are planted by hand, harvested by hand, and processed and stored for local consumption.
Cash is always difficult to earn.
In most rug making areas, weaving is a way for a farming family to produce a product which they can sell for cash. Kids do jobs appropriate to their ages. Even basic government schools usually cost money for materials, and fancier schools cost money for admission fees, uniforms, and books. Rarely is there the money to send children to school, and besides, they're needed to help do the family's work. Some of the work children help with is carpet weaving.