The paper examines child labor characteristics in Ethiopia using the data collected by Young Lives project. The study indicates that more than 55.73 percent of the 7 to 17-year-olds has participated in labor market. The result also shows a higher percentage of children participating in economic activities in rural areas than urban areas. We find supportive evidence of the luxury axiom that poverty drives child labor. Our result shows that poverty appears to be the main culprit of the prevalence of child labor in both rural and urban areas.