Disentangling Selection from Causation in the Empirical Association between Crime and Adolescent Work
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Researchers consistently find that youths who work longer hours during high school tend to have higher rates of crime and substance use. On the basis of this and other research showing the negative developmental impact of an "intensive" work commitment during high school, the National Research Council (1998) recommended that federal lawmakers place limits on the maximum number of hours per week that teenagers are allowed to work during the school year. However, recent empirical research demonstrates the possibility of severe bias due to failure to control for unobserved sources of heterogeneity. I take advantage of two unique characteristics of the National Longitudinal Survey of Youth 1997 to assess the veracity of the claim that longer work hours are causally related to elevated involvement in crime and substance use. First, since the same respondents are followed over a period of five years, I use individual fixed effects to adjust for the omission of relevant time-stable covariates. Second, I exploit state-to-state variation in the restrictiveness of child labor laws governing the number of hours per week allowed during the school year, and the fact that these restrictions are relaxed (and eventually expire) with increasing age. In this modelbased on a fixed-effects instrumental variables (FEIV) estimatoridentification of the "work intensity effect" on problem behavior is predicated on exogenous within-individual variation in school-year work hours attributable to the easing of child labor restrictions as youths age out of their legal status as minors. The attractiveness of the FEIV estimator is its ability to eliminate bias in the estimated "work intensity effect" due to omitted stable and dynamic variables. The model thus provides an especially powerful test of the thesis that intensive employment during the school year causally aggravates involvement in problem behavior. The empirical results demonstrate that longer work hours are associated with a significant decrease in adolescent crime, contrary to virtually all prior research. The results for adolescent substance use are mixed, suggesting the possibility that longer work hours either increase or have no effect on substance use, depending on whether a fixed-effects or first-differences procedure is implemented.