دریافت کار و نگه داشتن آن! استخدام دبیرستان و انباشت ثروت بزرگسالان

Wealth inequality receives substantial scholarly attention, but mounting evidence suggests that childhood and adolescent traits and experiences contribute to financial disparities in the United States. This study examines the relationship between adolescent labor force participation and adult wealth accumulation. I argue that employed high school students gain practical life skills, abilities, and knowledge from work experience and business exposure that shape investment decisions and affect overall net worth. I use the National Longitudinal Survey of Youth, 1979 cohort, to empirically explore this idea. This study extends the wealth literature by identifying adolescent employment as an important mechanism that improves adult net worth and financial well-being.

Wealth inequality gained renewed and substantial sociological attention in recent years. This increased scholarly interest corresponds with considerable financial turbulence, which has affected the rich and poor alike. Just in the past 15 years, Americans witnessed a period of historic turmoil that included unprecedented highs in the stock market, burst bubbles in the financial and housing sectors, and a current economic climate that many compare to the Great Depression. Prior to the present upheaval, evidence suggested that most Americans prospered and improved their financial position throughout the 1990s and early 2000s (Wolff, 2006). Perhaps more importantly, wealth inequality stagnated from 1989 to 2004, suggesting that even the less wealthy benefited financially during this period (Wolff, 2007). Yet, substantial wealth inequality remained. Total household wealth was distributed nearly evenly into three groups: the wealthiest 1%, the next 9%, and the remaining 90% (Kennickell, 2006). At the bottom of the wealth distribution, nearly 17% of Americans in 2004 had zero or negative net worth (Wolff, 2007). Individuals in this wealth-poor group who owned assets were also more likely to carry debt (Kennickell, 2006). Furthermore, current household income and total household net worth share a low correlation (Lerman & Mikesell, 1988), suggesting that income inequality can only partially explain wealth inequality (Wolff, 2001). Thus, although the financial situation of most Americans improved during the 1990s and early 2000s, considerable inequality in wealth accumulation remained. One potential contributor to adult wealth inequality is adolescent labor force participation. Numerous studies examine the relationship between high school employment and various adult labor market outcomes such as income, wages, and occupational benefits (Bacolod and Hotz, 2006, Carr et al., 1996, Hotz et al., 2002, Light, 1999 and Ruhm, 1997). Despite the extensive scholarly work, whether a relationship actually exists continues to be disputed. The disagreement primarily centers on issues of selection, but several studies that model selection using conventional techniques suggest that high school employment affects future adult outcomes (Light, 1999 and Ruhm, 1997). I build upon this research by extending human capital arguments to adult wealth accumulation. Though many factors influence net worth throughout the life cycle, I expect that high school employment may be related to adult wealth accumulation, net of education, income, and other important social and economic influences. Additionally, employed high school students may have an advantage in the acquisition of essential assets such as homes and stock. This paper examines the relationship between high school employment and adult wealth accumulation by considering employment experience as an indicator of human capital. To explore this relationship, I use the National Longitudinal Survey of Youth because of its detailed demographic, employment, and financial questions. I model the relationship between high school employment and net worth with general linear regression and use logistic regression to model two important mechanisms for wealth accumulation—home and stock ownership. Notably, not all high school students participate in the labor force. Pre-existing traits may select certain individuals into employment and these same characteristics may also affect wealth inequality. Therefore, potential selection bias must be considered when examining the association between high school employment and adult wealth accumulation.

Wealth inequality remained relatively stable throughout the 1990s and the first few years of the 21st century (Wolff, 2007). Scholars have largely examined this wealth inequality by focusing on childhood and adulthood traits. Yet, important events in adolescence may also have a relationship with adult wealth accumulation. Specifically, a sizeable majority of high school students work at some time during their high school career and many students accumulate substantial employment experience (Manning, 1990). In this paper, I use the National Longitudinal Study of Youth to explore the long-term financial effects of this common phenomenon by examining the relationship between high school employment and adult wealth accumulation. Recent research suggests the possibility of such an association by examining the long-term effects of adolescent employment on adult labor force outcomes (Carr et al., 1996, Light, 1999 and Ruhm, 1997). Importantly, the same knowledge and abilities that affect labor market outcomes may also have an association with broader indicators of adult financial well-being. Consequently, I expected a similar relationship for adult net worth and asset acquisition. High school employment is commonly used as an indicator of human capital. Through two main aspects of employment-work experience and business exposure-employed students may acquire practical life skills, knowledge, and abilities that are associated with adult financial well-being. To test the relationship between high school employment and adult wealth, I drew on a typology of high school employment (Mortimer, 2003). This typology consisted of employment categories ranging from high intensity/high duration to low intensity/low duration workers. For adult net worth, students in the high duration categories – those who worked more than the median duration (6.75 months) at their jobs – were associated with significantly more wealth than nonemployed students. This result suggested that these employed students gained extensive human capital resources from their substantial work commitments. These students honed practical life skills and abilities from their employment experience that certainly have practical application in future jobs, but may also extend into their personal lives (Phillips & Sandstrom, 1990). Longer work investments may create opportunities for increased responsibility as well as development of advanced skills and resources (Mortimer, 2003). Additionally, I argued that high school employment would be associated with asset ownership. Specifically, I examined the relationship between adolescent labor force participation and the acquisition of two major assets: homes and stock. For home ownership, only students in the two high duration employment categories were associated with greater odds of ownership than their nonemployed peers. This suggests that the human capital investments needed to create an advantage over nonemployed students in home ownership were conferred only to those students with substantial work investments. In contrast, for stock ownership, high school students in all four categories of the employment typology were associated with greater odds of ownership. While the overall pattern is slightly different from that of home ownership and net worth, students with more employment experience were associated with greater odds of stock ownership as adults. Since stock ownership is still relatively rare in the typical financial portfolio, students may not have many resources to increase accessibility to this asset. Due to work experience and business exposure, high school employment facilitates acquisition of human capital resources that are related to adult stock ownership. Many factors influence high school students’ labor force participation and, upon employment, other characteristics such as work intensity and duration. It is important to keep in mind that factors related to work intensity and duration may also be related to adult wealth. Though I controlled for many of these observed factors in the multivariate models, pre-existing unobserved traits such as an ability to delay gratification, understanding of money, parental values, and/or entrepreneurial spirit may differentially shape high school students’ employment experiences. To account for these unobserved traits, social scientists have used a variety of methods including random effects, fixed effects, and instrumental variable approaches (e.g. Apel et al., 2006, Light, 1999, Paternoster et al., 2003 and Ruhm, 1997). Recent efforts have also incorporated more advanced econometric models (Hotz et al., 2002). Results regarding the influence of unobserved traits, particularly with methods that use instrumental approaches, are mixed. More research is needed to understand how recent econometric advances differ from instrumental variable approaches and how this may affect the given relationship under study. It is indeed a limitation of this paper that unobserved traits are not well addressed empirically, but the paper nevertheless demonstrates the importance of high school employment for adult wealth accumulation when observed pre-existing characteristics are taken into account. This study analyzes school year work patterns, but future research should explore summer and seasonal employment. Though school and family obligations may restrict seasonal employment during the winter break, summer employment may be largely free of such constraints. Therefore, summer employment may differ from other employment periods in terms of the types of jobs available to students and the absence of time constraints. Additionally, there may be differences in the characteristics of students who are more likely to seek and gain summer employment. If students increase their work commitments during the summer, they may have greater opportunities to build human capital. Thus, summer work may create opportunities for students who do not work during the school year to gain employment, build human capital, and improve their adult financial well-being. Future research should also explore how race/ethnicity and gender affect the relationship between adolescent work and adult wealth accumulation. For example, high school employment may be a potential mechanism that could reduce wealth inequality. Since racial/ethnic minorities accumulate less wealth than whites, high school employment may be an opportunity for these groups to build human capital that will be positively associated with improvement in their future financial well-being. Similarly, gender might also play a crucial role in understanding how high school employment is related to adult net worth. Future research should explore how racial and gender differences in workplace opportunities will affect students’ abilities to accumulate human capital and how this, in turn, shapes their future financial well-being.