Liquidity constraints are implicit within our framework. They plan an important role in many models of child labor supply (e.g. Baland and Robinson 2000, Ranjan 2001) and their importance in child labor decisions has some empirical support (Edmonds 2006). Even if schooling were purely an investment, liquidity constraints can generate a link between income and child labor if liquidity constraints force families to choose less school than optimal given the market return and opportunity costs to schooling.