Events at CERGE-EI

Thomas Le Barbanchon, Ph.D.

Bocconi University, Milano, Italy

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Authors: Thomas Le Barbanchon, Diego Ubfal, and Federico Araya

Abstract: We provide the first estimates of the effects of "working while studying" that use controlled random variation in job offers. We leverage a Uruguayan program offering 9-to-12-month employment in state-owned companies by lottery to enrolled students. Using social security data matched to 122,195 lottery applications, we estimate a positive and statistically significant 9% effect of working in a program job on youth labor earnings over the four post-program years. We find large positive effects on enrollment during the program year, consistent with the enrollment conditionality of the program and smaller effects in the post-program years. Our in-house survey indicates that students substitute leisure and household chores with work, without significant reductions in studying time. Finally, a decomposition of the earnings effect shows that accumulation of work experience can explain the majority of the increase in earnings. However, returns to experience are lower among participants than among the control group, which is in line with a null effect of the program on soft skills as measured in our survey.
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Full Text:  “The Effects of Student Employment: Evidence from Uruguayan Lotteries”