This paper examines determinants of work participation and school attendance for children aged 7-15 using survey data from rural Ethiopia. To this effect, a bivariate probit model that addresses the interrelatedness of the two decisions is employed. Given the agrarian nature of the economy, especial focus is given to child labour on family farms and within the household. The trade-off between child labour and educational attainment is also analysed by estimating an equation for age-adjusted educational attainment of children. Male children are found to be more likely to attend school than female children implying gender bias. There is also some ‘specialization’ in child labour with females having a higher likelihood and intensity of participation in domestic chores while males having a higher likelihood as well as intensity of participation in market work. Besides, while male children are more likely to combine schooling with market work, their female counterparts are more likely to combine domestic work and schooling. With regard to household characteristics, large family size and the number of dependents increase the probability of combining schooling with both work activities. While education of the head increases the likelihood of school attendance, large livestock population increases the likelihood of combining schooling and market work. More importantly, long hour of work is found to reduce educational attainment of working children.