Research Paper #32 Can Microinsurance Help Prevent Child Labor? An Impact Evaluation from Pakistan

Child labour is a common consequence of economic shocks in developing countries. This paper explores how reducing vulnerability through insurance impacts child labour and schooling. Using the case of a health and accident insurance scheme by a Pakistani microfinance institution, the study finds that increased insurance coverage results in a lower incidence of child labor and reduced earnings from child labour. The effect is largely attributed to an ex-ante feeling of protection as opposed to a shock-mitigation effect.