We examine the effects of the Ajuda Mtua (AM) reciprocal adult work programme on child labour and education. A possible reason for AM's introduction to the Nampula province of Mozambique, where child labour is used in farm production, is the failure of the labour and finance markets. We calculate that AM reduces child labour by eight percentage points using difference in differences. In our view, AM lowers child labour by offering inexpensive adult labour and maybe raising farm output. The effects of Village Saving and Loan Associations (VSLA) and the combined effects of AM and VSLA are compared to the results of AM (VAM). Both VSLA and VAM do not lessen child labour. if credit is applied in a way that raises labour demand over what AM labour can support market failures may be more successful at reducing child labor than addressing financial market failures. Results on schooling are mixed.
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