Can a Positive Income Shock Generate a Poverty Trap? Commodities and Child Labor [Pode um aumento no ingresso gerar armadilhas de pobreza? Recursos naturais e trabalho infantil] [¿Puede un aumento en el ingreso generar trampas de pobreza? Recursos naturales y trabajo infantil]

We present a theoretical model in order to study the causal relation between commodity prices and poverty traps. Using an overlapping generation’s framework where savings, education, fertility and child labor are endogenous variables we find four central results: 1) High commodity prices may generate poverty traps. 2) Given commodity prices, high labor productivity in the production of human capital reduces the likelihood of a poverty trap. 3) When there is child labor, the growth rate of human capital negatively depends on the commodity prices. 4) Child labor may lead to a decrease in both physical and human capital. © 2016, Universidad del Rosario. All rights reserved.

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