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Private transfers and college students’ decision to work

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  • Bachmann, Andreas
  • Boes, Stefan

Abstract

We estimate the impact of external financial support on the labor supply of students during their tertiary education. Using a dynamic labor supply model and accounting for the endogeneity of income from private transfers, we find a significantly lower likelihood of being employed for transfer recipients. Our results suggest that private transfers lead to a shift in students’ time allocation, lowering their hours devoted to working and increasing their time devoted to studying. We find evidence for a psychological component of receiving transfers through an increase in the perceived risk of failure in academic studies.

Suggested Citation

  • Bachmann, Andreas & Boes, Stefan, 2014. "Private transfers and college students’ decision to work," Economics of Education Review, Elsevier, vol. 42(C), pages 34-42.
    • Handle: RePEc:eee:ecoedu:v:42:y:2014:i:c:p:34-42
    DOI: 10.1016/j.econedurev.2014.05.005
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    Cited by:

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    3. Sprietsma, Maresa, 2015. "Student employment: Advantage or handicap for academic achievement?," ZEW Discussion Papers 15-085, ZEW - Leibniz Centre for European Economic Research.

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    More about this item

    Keywords

    Financial support; Student employment; Time trade-off; Simultaneity bias;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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