The Role of the Family in Determining Youth Employment

Many youths aged twelve to sixteen are working part-time while attending full-time schooling as required by law for youths younger than sixteen. These youths balance schoolwork with employment, family responsibilities, and leisure time. Their early employment decisions may have implications for their human capital acquisition and subsequently future earnings (Michael and Tuma 1984). However, work allows youths to increase their current personal consumption and gain work experience. Parents provide for much of their children's consumption and many also provide cash transfers (allowances) so their children can choose some of their own consumption. Youth employment depends upon parents' willingness and ability to provide consumption goods and allowances, the youth's desire for personal freedom, and the youth's desire for work experience. Furthermore, parents may attempt to encourage/discourage work effort given their children's desire to work by decreasing/increasing allowances. In this paper, I examine whether youth work intensity, measured alternatively by hours worked per year and earned income, and parental allowances are jointly determined. Results suggest that parental allowances negatively affect youth work intensity by either measure but I do not find evidence that parents adjust allowances in response to youths' decisions regarding work intensity. Interestingly, I find that black and Hispanic youths work fewer hours and earn less per year than white youths while receiving greater parental allowances. I also report on a number of other family and individual determinants of youth work intensity and parental allowances.