Does Employment During Adolescence Reduce Adult Welfare Participation?

Abstract

This study is the first to use welfare participation to investigate the impact of working during adolescence on outcomes later in life. I use National Longitudinal Survey of Youth (NLSY) 1979 data to investigate the impact of early-life employment on both the welfare payment and probability of welfare participation in the respondents’ 20s and 30s. I use a variety of model specifications, including random effect and Heckman selection models, to check the robustness of the results. The study shows that the impact is generated mainly from the hours worked during the ages of 17, 18 and 19. Working one extra full-time week per year between the ages of 17 and 19 reduces the probability of receiving welfare in the 20s by 8.2 per cent (2.5 percentage points) for females and 10.9 per cent (2 percentage points) for males.