Youth Employment and Academic Performance in High School

CEPR Discussion Paper Series No. 1861

Posted: 5 Nov 1998

See all articles by Zvi Eckstein

Zvi Eckstein

The Interdisciplinary Center (IDC); Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Kenneth I. Wolpin

University of Pennsylvania - Department of Economics

Date Written: April 1998

Abstract

The Fair Labour Standards Act (FLSA) imposes restriction on working hours and the type of jobs held by minors at ages below 18. Hours worked in the National Longitudinal Survey of Youth (NLSY) sample increased monotonically from 2.5 for the 14-year-olds to 16.2 for the 18-year-olds, and among those who worked positive hours, it increased from 8.9 to 24.5. This evidence is, de facto, in compliance with the FLSA regulations on weekly hours. The aim of this paper is to assess one of the underlying premises for the legislation, namely that working while attending high school could adversely affect school performance. We formulate and estimate an explicit sequential decision model of high school attendance and work that captures in a stylized fashion the important institutional features of high school grade progression. Individuals accumulate credits (courses) towards graduation depending on the individual's history of performance (knowledge acquisition), the level of participation in the labor market (hours worked) and their known (to them) ability and motivation. The labor market (randomly) offers wages for part-time and full-time employment that depend also on some inherent skill endowment and labor market experience. The value of attending high school consists of both the perceived investment pay-off to graduation and on a current consumption value which is random. We simplify the model by assuming that a terminal condition for decisions during the high school period and its value can be estimated as an additional parameter of the model. Our results indicate that a policy that forced youths to remain in high school for five years or until they graduate, whichever comes first, without working would increase the number of high school graduates by slightly more than 2 percentage points (from 82% to 84.1%).

JEL Classification: J15, J20, J24

Suggested Citation

Eckstein, Zvi and Wolpin, Kenneth I., Youth Employment and Academic Performance in High School (April 1998). CEPR Discussion Paper Series No. 1861, Available at SSRN: https://ssrn.com/abstract=108189

Zvi Eckstein

The Interdisciplinary Center (IDC) ( email )

P. O. Box 167
Herzliya, 69978, PA Pennsylvania 46150
United States
+972 9 9602706 (Phone)
+972 9 9602758 (Fax)

HOME PAGE: http://www1.idc.ac.il/Faculty/Eckstein/index.html

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Kenneth I. Wolpin (Contact Author)

University of Pennsylvania - Department of Economics ( email )

Ronald O. Perelman Center for Political Science
133 South 36th Street
Philadelphia, PA 19104-6297
United States
215-898-7708 (Phone)
215-573-2057 (Fax)

Do you have negative results from your research you’d like to share?

Paper statistics

Abstract Views
1,506
PlumX Metrics