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This article is motivated by the
remarkable observation that children of land-rich households
are often more likely to be in work than the children of
land-poor households. The vast majority of working children
in developing economies are in agricultural work,
predominantly on farms operated by their families. Land is
the most important store of wealth in agrarian societies,
and it is typically distributed very unequally. These facts
challenge the common presumption that child labor emerges
from the poorest households. This article suggests that this
apparent paradox can be explained by failures of the markets
for labor and land. Credit market failure will tend to
weaken the force of this paradox. These effects are modeled
and estimates obtained using survey data from rural Pakistan
and Ghana. The main result is that the wealth paradox
persists for girls in both countries, whereas for boys it
disappears after conditioning on other covariates.
