Research on child labor has not addressed the fact that a large portion of child work is occurs in family businesses. We analyze the role that household productive activities in agriculture or commerce play in the determination of child work and schooling and whether these have differentiated effects by gender. Using Nicaraguan household data, we find that household economic activity leads to a higher probability of child work for boys and girls but does not displace schooling. The type of economic activity matters: agriculture increases the likelihood of work among boys; commercial businesses increase the probability of school enrollment of boys only. These findings suggest that child work in family employment has potentially large income effects that facilitate schooling.
