An Empirical Analysis of the Effects of Student Work and Academic Performance on the Probability of Employment

Abstract

The theoretical relationship between student work and post-college probability of employment is ambiguous due to opposing direct and indirect effects on human capital accumulation. Student work may lower academic performance and thus harm the likelihood of getting a job while enabling students to acquire skills that increase their labour market odds. In this paper, we provide an answer to the question whether the policy should encourage or limit student work by using rich data, which allows us to compare the effects of the two investments in human capital on the likelihood of employment. We use personal characteristics, socioeconomic background, and academic performance in propensity score matching to calculate the differences in the probability of employment for different amounts of student work. We found that only work experiences up to two years had a beneficial effect on employment prospects. Much larger effects were observed for improvements in educational attainment like graduation and improvement in GPA. Our results provide support for setting limits to the extent of student work during college, but certainly not for its prohibition. 1 We would like to thank the Slovenian Statistical Office for provision of the data and allowing us to prepare the data in a secure room. We would also like to thank two anonymous referees for many valueable comments.