TY - JOUR AU - Edmonds, Eric V AU - Pavcnik, Nina AU - Topalova, Petia TI - Trade Adjustment and Human Capital Investments: Evidence from Indian Tariff Reform JF - National Bureau of Economic Research Working Paper Series VL - No. 12884 PY - 2007 Y2 - February 2007 DO - 10.3386/w12884 UR - http://www.nber.org/papers/w12884 L1 - http://www.nber.org/papers/w12884.pdf N1 - Author contact info: Eric V. Edmonds Department of Economics Dartmouth College 6106 Rockefeller Hall Hanover, NH 03755 Tel: 603/646-2944 Fax: 603/646-2122 E-Mail: Eric.V.Edmonds@Dartmouth.edu Nina Pavcnik Department of Economics 6106 Rockefeller Center Dartmouth College Hanover, NH 03755 Tel: 603/646-2537 Fax: 603/646-2122 E-Mail: nina.pavcnik@dartmouth.edu Petia Topalova Asia and Pacific Department International Monetary Fund (IMF) 700 19th Street, N.W. Washington DC 20431 E-Mail: PTopalova@imf.org AB - Do the short and medium term adjustment costs associated with trade liberalization influence schooling and child labor decisions? We examine this question in the context of India's 1991 tariff reforms. Overall, in the 1990s, rural India experienced a dramatic increase in schooling and decline in child labor. However, communities that relied heavily on employment in protected industries before liberalization do not experience as large an increase in schooling or decline in child labor. The data suggest that this failure to follow the national trend of increasing schooling and diminishing work is associated with a failure to follow the national trend in poverty reduction. Schooling costs appear to play a large role in this relationship between poverty, schooling, and child labor. Extrapolating from our results, our estimates imply that roughly half of India's rise in schooling and a third of the fall in child labor during the 1990s can be explained by falling poverty and therefore improved capacity to afford schooling. ER -