# **1. Introduction**

Child labor is pervasive in most sub-Saharan African countries and it can at times constrain the choices and freedoms of children and their education and human welfare later in life. About 38% of children aged 7-14 in sub-Saharan Africa are engaged in work (UNICEF 2005). In Ghana, about one in every six children aged 7-14 are working in 2005/06 (15.6%), accounting for about 317,000 children actively working for economic gain. The common assumption in the literature—led by the influential, theoretical work of Basu and Van (1998)—is that child labor is driven by income poverty. In analyzing quantitative and qualitative evidence in the agrarian economy of Ghana, this paper tests the hypothesis of the “luxury axiom” by Basu and Van that a child only works when household income drops very low. Not only has no research topic on child labor received more attention than this relationship between child labor and monetary poverty.<sup>2</sup> But also much research on child labor, while often citing its non-poverty influences, views household poverty as the most important determinant.<sup>3</sup> This is not unexpected as the majority of studies on child labor are conducted by economists who tend to focus their analysis on the subset of economic sources of child labor.

Yet household decisions for or against child labor are rarely the consequence of one single factor (for example, monetary poverty) or event (for example, an income shock). Rather, they are often—as the case in Ghana—related to a set of events and factors ranging from the structure of the economy (which is largely led by family farming), cultural influences (social norms viewing child labor as part of socialization), occupational choices (with no higher reported economic returns to basic education in rural areas), to low government priority and capacity (to enforce anti-child labor laws), the seasonal demand for agricultural work and, among others, demographic variables (such as low parental education and children’s ‘economic value’ increasing with age). This paper thereby postulates that the ‘luxury axiom’ can often poorly define and delimit the realm of analysis on child labor to economic factors. Applying it as a point of departure – which is a common approach in the literature – can constrain a more holistic, cross-disciplinary understanding of why both poor and non-poor children work in agrarian economies like Ghana.

On the empirical side, because most studies do not combine and enrich household survey analysis with qualitative data analysis, they often ignore important factors such as cultural norms or attitudes about child labor that are generally not well captured in household surveys. On the theoretical side, the discussion on child labor is driven by theoretical models that at times implicitly claim to identify universal ‘truths’ as they often _a priori_ contain the causes of why children work and the preset policy responses. They often neglect the idiosyncratic and heterogeneous sources of child labor, i.e. the specific traits of different groups of children of different gender and age involved in different economic activities in different geographic areas within different countries with different norms and institutions over different seasons and time periods. Thus, while a strong interrelationship between household poverty and child labor appears intuitive and is argued and modeled theoretically at the global level (e.g. Basu and Van 1998; Bardhan and Udry 1999; Dessy and Vencatachellum 2003), this paper argues that neither such intuition nor such universal theories seem to hold strongly with quantitative or qualitative evidence in agrarian economies like Ghana. It provides some empirical

> 2 For a comprehensive overview of this discussion, see Edmonds 2008.

> 3 Some examples are: Grootaert and Kanbur 1995; U.S. Department of Labor 2000; Canagarajah and Nielsen 2001; Blunch and Verner 2001; ILO 2002; Ray 2003; Amin _et al._ 2004; Edmonds and Pavcnik 2005; Edmonds 2005; Huebler 2008.

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