This paper examines the relationship between household income shocks and child labor. In
particular, we investigate the extent to which transitory income shocks lead to increases in child
labor and whether household access to credit mitigates the effects of these shocks. Using panel data
from a survey in Tanzania, we find that both relationships are significant. Our results suggest that
credit constraints play a role in explaining child labor and consequently that child labor is inefficient,
but we also discuss alternative interpretations.