I'd be hesitent to have kids work with carving tools. If they're
sharp enough to cut wax, they're sharp enough to cut kids.
Depending on your kids' ages, I disagree. If you make sure that they
understand that sharp things are sharp, and that they are old enough
to understand that this means the tool deserves respect and caution,
I think wax working would be a very kid-friendly sort of activity.
It wasn't so long ago that I was involved in the Boy Scouts, and
they still let kids as young as 12 or 13 who had passed a safety test
carry around little pocket knives to whittle and carve at bits of
wood. Compared to those little folding blades that could never hold a
real edge, properly maintained carving tools ought to be a great deal
safer, as long as the children know how to use them properly.