Youth employment and substance use.

A significant portion of teens work while in school and the consequences of that work are of potential concern to society. While there is widespread support for combining work and school, and some evidence that employment has positive effects on youth development, previous research has revealed some potentially harmful consequences of employment among teens. In this paper, we investigate the relationship between teen employment and substance use. We extended this literature by studying two different cohorts of youth, and by exploiting arguably exogenous variation in youth employment and earnings caused by changes in minimum wages and the business cycle (unemployment). Estimates suggest that hours of work are positively associated with alcohol and cigarette use. However, if selection on unobserved variables were equal to selection on observed variables, these associations would be close to zero. With respect to the association between earnings and substance use, the evidence is less clear.