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In-School Work Experience, Parental Allowances, and Wages

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Author Info

  • Dustmann, Christian

    ()
    (University College London)

  • Micklewright, John

    ()
    (Institute of Education, University of London)

  • van Soest, Arthur

    ()
    (Tilburg University)

Abstract

In many industrialised countries, teenagers have a significant spending power, and they are important customers for specialised industries. The income of teenagers still in full time education comes from two major sources: parental pocket money, and earnings from part time jobs. Little is known about the way these sources interact, and how they depend on parental, school and family characteristics. In this paper, we analyse labour supply of 16 year old British teenagers together with the cash transfers made to them by their parents. We develop a theoretical model, which serves as a basis for the empirical specification in which labour supply and transfers are jointly determined. We estimate this model using unique data on labour supply of teenagers, the wages they receive, and transfers made to them by their parents. We show how these two processes depend on each other, and how transfers and labour supply react to changes in wages.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1235.

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Length: 37 pages
Date of creation: Aug 2004
Date of revision:
Publication status: published under revised title in: Empirical Economics, 2009, 37 (1), 201-218
Handle: RePEc:iza:izadps:dp1235

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Related research

Keywords: intra-household transfers; teenager labour supply;

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References

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  1. Light, Audrey, 2001. "In-School Work Experience and the Returns to Schooling," Journal of Labor Economics, University of Chicago Press, vol. 19(1), pages 65-93, January.
  2. V. Joseph Hotz & Lixin Xu & Marta Tienda & Avner Ahituv, 1999. "Are There Returns to the Wages of Young Men from Working While in School?," JCPR Working Papers 101, Northwestern University/University of Chicago Joint Center for Poverty Research.
  3. Blundell, Richard & Macurdy, Thomas, 1999. "Labor supply: A review of alternative approaches," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 27, pages 1559-1695 Elsevier.
  4. Christopher J. Ruhm, 1995. "Is High School Employment Consumption or Investment?," NBER Working Papers 5030, National Bureau of Economic Research, Inc.
  5. Hausman, Jerry A, 1985. "The Econometrics of Nonlinear Budget Sets," Econometrica, Econometric Society, vol. 53(6), pages 1255-82, November.
  6. Sonia Bhalotra & Chris Heady, 2000. "Child farm labour: theory and evidence," LSE Research Online Documents on Economics 6654, London School of Economics and Political Science, LSE Library.
  7. Gary S. Becker, 1974. "A Theory of Social Interactions," NBER Working Papers 0042, National Bureau of Economic Research, Inc.
  8. Christian Dustmann & John Mickelwright & Najma Rajah & Stephen Smith, 1996. "Earning and learning: educational policy and the growth of part-time work by full-time pupils," Fiscal Studies, Institute for Fiscal Studies, vol. 17(1), pages 79-103, February.
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Citations

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Cited by:
  1. Fran├žois-Charles Wolff & Christine Barnet-Verzat, 2008. "Pocket money and child effort at school," Economics Bulletin, AccessEcon, vol. 9(13), pages 1-10.
  2. repec:ebl:ecbull:v:9:y:2008:i:13:p:1-10 is not listed on IDEAS
  3. Kalenkoski, Charlene Marie & Sabrina Wulff Pabilonia, 2004. "Parental Transfers, Student Achievement, and the Labor Supply of College Students," Working Papers 374, U.S. Bureau of Labor Statistics.

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