This paper examines the psychosocial development of Nepalese child laborers. The findings are discussed in relation to the questions of where and how learning occurs, whether transfer or generalizations occur from specific skills to other activities, and what role the socialization process plays in the psychological well-being of the Nepalese child laborers. The child laborers in the carpet factories had been participating in non-formal education classes before this study. They were administered the short version of the Nowicki-Stickland Locus of Control Scale. Findings showed that the psychological well-being of the children were at lower levels than that of their peers who went to school. However, the laborers had more internal locus of control, showing a higher sense of control over their lives. Practical implications are discussed. (Contains 144 references.) (JDM)