The Palestinian Economy. Theoretical and Practical Challenges

328
Di Maio – Nandi
Table 4: The effect of closure days on child labour and school
attendance in West Bank
number closure days
number closure days × distance
age
father education
mother education
Constant
Child
labour
0.004***
(0.001)
0.203***
(0.010)
-0.008**
(0.004)
-0.022***
(0.004)
-4.038***
(0.156)
(1) (2)
School Child School
attendance labour attendance
-0.000
(0.001)
-0.192***
(0.013)
0.043***
(0.005)
0.030***
(0.004)
3.701***
(0.190)
0.006***
(0.002)
-0.000*
(0.000)
0.203***
(0.010)
-0.009**
(0.004)
-0.022***
(0.004)
-4.084***
(0.158)
-0.002
(0.002)
0.000*
(0.000)
-0.192***
(0.013)
0.043***
(0.005)
0.030***
(0.004)
3.774***
(0.191)
Observations 41,789 41,789
F-test 0.000 0.000
-.479
-.464
(0.021)
(0.021)
Note: Results from the biprobit model described by equations (1) and (2). ***, **, * stand for
significant at 1%, 5% and 10% level, respectively. Weights used. Standard errors (in parenthesis)
are robust. Year and district fixed effects are included in all regressions.
The last line of Table 4 reports the error correlation ρ between child labour and school
attendance decision which is around -0.47 for both specifications. The negative sign
indicates that the unobservable factors affect household decision about child’s status in
opposite direction, i.e. there is a trade off between the two outcomes. The relatively high
value of the parameter indicates that in WB child labour and schooling are indeed not
independent decisions.
5.1.1. Robustness checks
Table 5 reports the results of some robustness checks on the effects of the number of
closure days on child labour and school attendance. In Column 1 we estimate our
preferred specification (Column 2 of Table 4) including a dummy variable for the
summer period to control for a possible cyclical component in the child labour supply
related to school holidays. The summer variable turns out to be significant for child