Youth employment and academic performance: Production functions and policy effects

This paper proposes an approach to identifying the education production function with endogenous inputs, and applies it in the context of part-time employment decisions by UK teenagers in compulsory education. We identify simultaneously the effect of part-time employment and latent endogenous inputs including study effort, at different points in time, and compare the reduced-form effect of having a job while at school with the production function parameter. Part-time employment is shown to reduce academic performance among girls but not boys. We present evidence that this is due to employment crowding out a wider range of productive activities among girls than boys.