The Impact of Labor Market Work and Educational Tracking on Student Educational Outcomes: Evidence from Taiwan

Abstract

This study empirically investigates how working while enrolled in high school affects educational outcomes, while accounting for self-selected educational tracking. Using a longitudinal survey of Taiwanese youth and exploiting the inter-zip-code geographic variations in youth-preferred industries, we find a negative effect of school-year work on educational achievement, and the negative marginal impact is much stronger for academic-track than for vocational-track students. An exogenous increase in school-year hours worked of 10 hours per week lowers college entrance scores by a 0.117 (0.083) standard deviation for academic-track (vocational-track) students. The negative impact of school-year work tends to be overstated if the endogeneity arising from educational tracking is not acknowledged—with upward biases as large as 16% and 30% for academic- and vocational-track students, respectively. Among subjects, math scores suffer most from working during the school year.