The age is 12. That's the line.
Just kidding It's hard to say where that line falls, and indeed it's a bit different for every individual human being - to generalize, I'm thinking about the line between childhood and adulthood.
On the one hand, I want to dissent with cassyroo and approach this from the point of view of art being in the eye of the beholder. The quality of vision in a folk art painting or sculpture, in some cases, should be paramount. A great piece of art speaks to it's audience, and the particulars of who the artist is, while interesting, might be considered totally irrelevant. Does it matter if the artist is 10 or 60? If appreciated from a purely aesthetic point of view, then no it doesn't.
But that point of view is flawed too, because in folk art (and art in general), the perspective of the artist can be so much a part of appreciation and value of the piece. That's where you think of art not in a purely aesthetic way, but as a form of communication - which is what Ocean's Edge touched on. In communication it matters very much who is speaking - culturally, socio-economically, what is their perspective? Where are they in their lives? What life experiences have they had and how do those experiences speak subtly through their communication?
The answer may lie somewhere in the middle. Good art is both aesthetic and communicative.
So, here's my opinion. Not all "children's art" should be considered folk art. But some children may be able to produce art that can be considered folk art.
I would imagine that at 3 years old, a person is still learning to communicate and is not aware enough of themselves and their environment to have formed a coherent perspective. The art they create at that early age is still art, but it's developmental, individual, expressive, but not informed enough to be truly deliberate.
By 16, all that has probably changed. By then a person's perspective has matured and while it may continue to change throughout a person's life, at this point it's a coherent perspective. And if this perspective is "folky" enough (untrained in traditional technique, coming from a distinct way of life or subgroup of society) then it might be considered folk art. If the art is also aesthetically interesting, then it might be considered good folk art.