The Impact of Foreign Remittances on child labor in Pakistan: A Time Series Analysis

Abstract

This research is conducted to investigate the relationship between remittances and child labor in Pakistan. It has been used to find out the impact of foreign remittances on child labor by time series data for the period of 1992-2021taken from the World Bank Indicator, International Labor Organization (ILO) and economic survey of Pakistan. Child labor is taking as dependent variable while foreign remittances, poverty, literacy and total fertility rate are taking as independent variable. To find out the result, we applied Unit Root Test to check the stationary of data and after that Johnson co integration model has applied to check the long-run relation and for short-run relationship Error Correction Model has used. The results show that, there is a significant negative effect of foreign remittances and literacy rate on child labor. Poverty and total fertility rate are exerting positive impact on child labor in Pakistan. It has been concluded that the change in the values of poverty and fertility as well as their lag values significantly and positively affected child labor.