Teenagers: Employment and Money Management

Teenagers often contemplate part-time employment during the school year and around the holiday season in particular. A recent survey of 14- to 17-year-olds found that 34% were employed sometime during the year. It also found that:

27% worked 10 or fewer weeks per year (most likely during the summer months),
39% worked more than 10 weeks per year and 20 or fewer hours per week, and
34% worked more than 10 weeks per year and more than 20 hours per week [2]

Potential Benefits of High School Employment

Part-time jobs for high school students can encourage independence, responsibility, and good work habits. A good job can help a student discover what she or he is good at and interested in. Some jobs help students develop skills and knowledge about occupations that they might pursue in the future. A job may also expose a student to positive adult role models. Many jobs to which teens are attracted also offer fairly flexible scheduling. Babysitting, yard work, and golf caddying are examples of jobs that offer students a good deal of schedule flexibility ([5], pp. 365-367).

Students who work at jobs that are linked to an official school program, sometimes referred to as work-based learning programs, can increase their knowledge and skill for employment in particular occupations. The negative impact that working long hours may have on academic achievement can be lessened if students' work and school experiences are aligned through such school-to-work initiatives [7]. One study reported higher college entrance rates among students who participated in work-based learning programs than among students who did not participate in such programs [3].

Potential Detriments of High School Employment

A variety of research studies have challenged earlier views about the benefits of after-school employment, particularly for those who work more than 15 or 20 hours per week [3]. When compared with other students, those who work more than 15 or 20 hours per week tend to have some of the following problems:

* Lower academic achievement and school participation: Less engagement in schooling, lower rates of homework completion, higher dropout rates, and lower likelihood of college attendance [3; 6; 1]
* Increased delinquent behaviors: Higher rates of drug and alcohol use, higher incidences of interpersonal aggression and theft, more frequent trouble with police, and more arguments with their parents [3; 6; 1]
* Decreased time with family and decreased parental monitoring: Less time to spend with their families, making parental monitoring difficult; parents often assume that teens who work many hours can function more autonomously and should be permitted to have more independence [3; 6; 1; 4]

The negative outcomes of working longer hours are interrelated. For example, students who spend less time with their families and receive less parental monitoring tend to get involved in high-risk behaviors more often than children who spend a lot of time with their families do.

Researchers also disagree about the direction of the negative effects of youth employment. Some argue that students who work long hours are less interested in school and more inclined to experiment with drugs and alcohol before they join the workforce, which explains their interest in working longer hours ([1; 6]).

Despite the controversy over the impact of youth employment, parents should consider limiting the hours their teenager works. Laurence Steinberg, an adolescent development researcher, suggests that parents limit their sophomores' employment to 10 hours per week and their juniors' and seniors' employment to 20 hours per week ([5], p. 366).

How Earnings Are Spent

Adolescent earnings are a symbol of the transition to adulthood and can promote maturity. In cases where adolescents' earnings contribute to the family's budget, relationships with parents can be strengthened. On the other hand, adolescent earnings can also encourage unrealistic financial values and promote premature affluence [4].

In theory, a part-time job can teach students how to manage their money. In reality, only a small percentage of students save most of their money for college (11%) or contribute toward the family's living expenses (3%). Most adolescents-in low- and high-income families-devote their income to their own expenses: clothing, cars, food, entertainment, and, in some cases, drugs and alcohol [3]; [2]. Teens in the United States have a great deal of purchasing power, a fact of which manufacturers and advertisers are well aware. In the year 2000, U.S. teenagers (ages 12-19) spent $155 billion, $2 billion more than in 1999 [8].

Parents can influence teenagers' money management skills and spending habits. According to Steinberg, parents often believe that they lack the authority to tell their teenagers how to spend their money, particularly if the teens have earned it themselves. Whether an adolescent's money comes from work, from the family, or from gifts, Steinberg believes that parents should discuss the following aspects of money management with their children [5]:

* Savings: By high school, each teenager should establish a bank account. Teens who work should be encouraged to save a portion of their earnings for college and other future expenditures. Encouraging a child to set aside earnings is valuable even if parents can afford these expenses.
* Budgeting: Teenagers should be encouraged to make a weekly or monthly budget to help them know how much money they need for necessities-like lunches, transportation, and school supplies-and how much remains for other priority spending, such as charitable giving, clothing, food, and entertainment.
* Purchases: It is important for teenagers to have some autonomy in making purchases. When they are contemplating major purchases, however, teenagers should consult with their parents first to avoid being taken advantage of. Parents can also veto purchases that they feel are risky or too extravagant.

Teenagers will learn about financial responsibility from what they hear their parents say and what they see their parents do. Teenagers need to see their parents practice sound money management-saving, budgeting, and making rational (instead of impulsive) decisions about purchases. Children learn about family values and priorities when they observe their parents living within their personal means and voluntarily limiting expenditures so that more money can be saved or given to charity ([9], pp. 5-19).

Children's attitudes about work, money, spending, and saving are influenced by their parents, the media, their peers, and their own successes and failures. Children who develop good money management skills, who learn how to control the need to spend, and who are content with that self-control are more likely to become adults who can make sound financial decisions ([9], pp. 1-3).

Sources

[1] Bachman, Jerald G., & Schulenberg, John. (1993). How part-time work intensity relates to drug use, problem behavior, time use, and satisfaction among high school seniors: Are these consequences or merely correlates? Developmental Psychology, 29(2), 220-235. (ERIC Journal No. EJ464472)

[2] Johnson, David, & Lino, Mark. (2000). Teenagers: Employment and contributions to family spending. Monthly Labor Review Online, 123(9). Available: http://stats.bls.gov/OPUB/MLR/2000/09/contents.htm

[3] Kelly, Karen. (1998, July-August). Working teenagers: Do after-school jobs hurt? Harvard Education Letter Research Online. Available: http://www.edletter.org/past/issues/1998-ja/working.shtml

[4] Shanahan, Michael J.; Elder, Glen H.; Burchinal, Margaret; & Conger, Rand D. (1996). Adolescent paid labor and relationships with parents: Early work-family linkages. Child Development, 67(5), 2183-2200. (ERIC Journal No. EJ539845)

[5] Steinberg, Laurence, & Levine, Ann. (1997). You and your adolescent. New York: Harper Collins.

[6] Steinberg, Laurence; Fegley, Suzanne; & Dornbusch, Sanford M. (1993). Negative impact of part-time work on adolescent adjustment: Evidence from a longitudinal study. Developmental Psychology, 29(2), 171-180. (ERIC Journal No. EJ464468)

[7] Stern, David. (1997). Learning and earning: The value of working for urban students. ERIC Digest [Online]. Available: http://eric-web.tc.columbia.edu/digests/dig128.html (ERIC Document No. ED413405)

[8] Teenage Research Unlimited (TRU). (2001). Teens spend $155 billion in 2000 [Online]. Available: http://www.teenresearch.com/PRview.cfm?edit_id=75

[9] Whitcomb, John E. (2000). Capitate your kids: Teaching your teens financial independence. Milwaukee, WI: Popcorn.