Exploring the Effects of Childhood Family Structure on Teenage and Young Adult Labor Force Participation

In examining teenage and young adult employment, this study has three objectives. It seeks to throw light on reasons that some teenagers work and some do not. It explores the effect teenage labor force participation has on teenage educational attainment. Finally, it considers the longer-term effects of early employment on young adult work and wages. Four cross-sectional analyses are performed separately for male and female cohorts of original National Longitudinal Survey of Youth (NLSY) respondents who were aged 14 through 16 at the first interview in 1979. These analyses take the fullest advantage of the longitudinal nature of the data, using information from every year available, 1979 through 1993. Childhood family structure is found to have little impact on teenage employment and timely high school graduation. However, there is evidence that teenage employment has positive effects on high school graduation and later labor force participation. Exploring the Effects of Childhood Family Structure on Teenage and Young Adult Labor Force Participation The U.S. Department of Labor (1996) reports that the unemployment rate for the civilian, noninstitutionalized population aged 16 and over was 5.6 percent in March 1996. The unemployment rate for teenagers (aged 16–19) was 17.5 percent. In that month, 6.5 million teenagers were in the labor force, for a labor force participation rate of 55.8 percent. Of those participating, 5.6 million were employed. The unemployment rate for teenage males was 19.4 percent, higher than that for teenage females, 15.4 percent. The unemployment rate was lower for white teenagers (14.8 percent) than it was for black teenagers (33.5 percent). Teenage employment can have a variety of lifetime consequences. Short-term positive effects include increased household income through earnings and increased human capital through job experience. But employment may negatively affect educational attainment by reducing the likelihood that a teenager will graduate from high school or will graduate “on time. ” Longer-term effects resulting from teenage employment may include a stronger attachment to the labor force and higher wages later in life; conversely, they may include reduced economic success as a result of reduced schooling. In examining teenage employment, this study has three objectives. First, it seeks to understand why some teenagers work and some do not. Specifically, it explores the relationships among teenage labor force participation and household income and need, childhood experiences, the employment activities of other members of the teen’s household, teenage fertility, and local macroeconomic conditions. Second, it looks at educational attainment, considering whether there is a relationship between the likelihood of graduating from high school “on time” and having been employed while attending school. 2 Third, this study seeks to understand longer-term effects of teenage labor force participation. Specifically, do individuals who worked as teenagers demonstrate a stronger attachment to the labor force as young adults? Does teenage employment translate into higher wages for young adults? This paper continues with a discussion of the literature surrounding teenage labor force participation and the effects of family structure on childhood outcomes. In Section II, hypotheses based on human capital theory are presented. Section III discusses the data and empirical methods. Results are provided in Section IV, and are discussed in Section V.