Using a bivariate probit model, this paper investigates the factors that influence the likelihood that a child in Ethiopia will work or continue attending school. The results show that child labour effectively decreases the demand for education and suggest that prohibiting child labour, to break the competition existing between education and employment, could perpetuate poverty for future generations. Furthermore, we analyze the factors that affect children’s job satisfaction, with particular emphasis on the relationship between this satisfaction and schooling. Our results show, for example, that there is a positive satisfaction differential for girls, that paid work is associated with lower satisfaction and that children that work and study simultaneously are more satisfied.

Key words: schooling, child labour, job satisfaction.
JEL classification: I21, J13, J28.