Youths who work longer hours during high school tend to have higher rates of crime and substance use, among other problem behaviors. On the basis of this and other research demonstrating the adverse consequences of an extensive work commitment during high school, the National Research Council (1998) has called for policymakers to establish stricter limits on the number of hours per week that 16 and 17 year olds may work. However, recent empirical research demonstrates the possibility of severe bias due to inattention to unobserved sources of heterogeneity. In this research project, we propose taking advantage of two unique characteristics of a nationally representative panel of youths. First, since respondents are followed over a period of five years, we use a fixed effects panel estimator to adjust for the omission of relevant time-invariant characteristics. Second, we exploit state-to-state variation in the restrictiveness of child labor laws, and the fact that these child labor laws become less restrictive with increasing age. The resulting model is based on a fixed-effects instrumental variables (FEIV) estimator. In this model, identification of the """"""""work intensity effect"""""""" is predicated on exogenous within-individual change in school-year work hours that can be attributed to the easing of child labor restrictions as youths age out of their legal status as minors. The FEIV model provides an especially powerful test of the thesis that intensive employment during the school year is causally related to involvement in problem behavior.
