Is it a okay if a child swallows a tooth?

Yes but . . .: You'll need to explain how tooth fairy made exchange! aside from that, no harm from swallowing tooth, although we don't recommend it, as long as s/he doesn't complain of stomach pain. However, button batteries are a different matter altogether and actually quite dangerous as they can burn through esophagus. Check out http://www.Nema.Org/policy/environmental-stewardship/documents/batteryingest.Pdf.

Yes: This to will pass... Now if the child should inhale the tooth this is a different problem and intervention maybe necessary.

Yes: Swallowing a baby tooth is not a problem. It will just pass out no differently then a watermelon or sesame seed. Just have them write the tooth fairy a note so that they still get a reward for losing their tooth.