We develop a theoretical model where child labour results from a household'strade-off between sending a child to school or to work. Education isconsidered as a risky investment, since the survival of the child is notcertain. We explore the effects of public expenditure on education andhealth on child labour, specifying a transmission mechanism for each kind ofspending. On the one hand, we establish that health expenditure reduceschild labour all the more as child mortality rate is high. On the otherhand, a moderate aversion to risk is a necessary condition for educationexpenditure to reduce child labour. Our theoretical results are empiricallyvalidated on panel data from 66 developing countries between 1985 and2000.
