Does work harm academic performance of students? Evidence using propensity score matching

In this article we analyze the effects of student work on academic performance for college students. In order to reduce the endogeneity bias due to selection into treatment, we use propensity score matching technique. This approach allows us to estimate the average treatment effects on the treated separately for different years of study, which is not possible when inside instruments are used to deal with endogeneity of student work. We find predominantly negative treatment effects for all measures of academic performance (GPA, exam attempts, exams passed, and likelihood of passing a year), although many of these are economically and statistically insignificant. We supplement existing studies that do not estimate separate treatment effects for different years of study by showing that work while in college harms study outcomes mostly in the first year of study—by passing smaller number of exams and thereby increasing the likelihood of failing a year. Our results are consistent with evidence on difficulty with adjusting to college studies of first-year students, who face many uncertainties that affect finding the optimal allocation of time between studies, work and leisure.