The Effects of In-School and In-Tertiary Employment on Academic Achievement and Labour Market Transitions: Evidence from the Christchurch Health and Development Study

Work for pay by students could have both negative and positive effects on their lives. The most commonly cited detrimental effects relate to both the quality of their academic performance and the eventual quantity of their educational attainment. The most commonly cited beneficial effects relate to the facilitation of labour market transitions and the development of human capital. Ultimately, the consequences of student work experiences are empirical questions. To answer these questions, however, we need data that allow us to control for a wide variety of factors that would otherwise make it difficult to isolate the genuine effects of these early student work histories on subsequent outcomes.

Overseas studies have found relatively modest and often inconsistent evidence on the detrimental effects of in-school work on academic and educational outcomes. If these negative effects exist, they appear to be largely relegated to students who work excessively long hours and to those who come from relatively disadvantaged backgrounds. Other studies find evidence of positive effects from in-school work on subsequent wages and employment opportunities. Again, however, these results are not uniform across this literature.

The key methodological issues in this research area relate to unobserved heterogeneity and sample selection bias. The principal problem is that the estimated effects from these studies are generated from non-experimental data. Youth (and their families) chose whether or not they will work while in school, subject to possibly different labour market opportunities and constraints. Factors that influence early work histories may also affect later educational and labour market outcomes. If these variables cannot be quantified and included in these regressions, then the estimated coefficients on early work histories may be biased due to this unobserved heterogeneity. A slightly different perspective is to consider the endogeneity of the decision to work while enrolled in school. However, unless instrumental variables can be found (i.e., factors that directly influence this early work decision, but do not directly affect subsequent education and labour market outcomes), there is little chance of controlling for this sample selection process.

The approach taken in this current study is to take advantage of a rich and diverse set of personal, family, school and other characteristics available through the Christchurch Health and Development Study (CHDS). By controlling for the observed heterogeneity among the subjects of this longitudinal study, we should be able to better isolate the various immediate and longterm effects of the early work histories of students on their own eventual educational and labour market outcomes.