Sunday, July 30, 2017

Summertime: Is the Living Too Easy?

Senator Ben Sasse (R-NE) thinks young people have lost a sense of work ethic because they don't work as much over the summer as they did when Sasse was a teenager. As a parent of four kids and someone who focuses on labor economics, I found myself ambivalent about the article.

On the one hand, I sympathize with Sasse on the value of work and pushing our kids out of their comfort zones. My first formal summer job at the San Diego Wild Animal Park entailed cooking hot dogs and making cotton candy. It wasn't really "hard" work so much as it was, well, unpleasant work. To be fair, a lot of that I chalk up to being assigned next to the monkey enclosure (ugh). Beyond that though, pay was low, turnover was high, and the opportunity for advancement was limited. Nevertheless I earned some money and learned some humility, both of which I desperately needed at the time. And I was more motivated for college than ever, a privileged opportunity I had that a lot of my co-workers did not.

That said, while times have indeed changed, teenagers aren't really more "idle" over the summer than they used to be. They're just studying rather than working. Below, I've charted the proportion of 16-19 year olds who are in the labor force (that is, working or actively looking for work) and not in the labor force but enrolled in school. After 1989, the data allow us to split school enrollment further into full-time and part-time enrollment.

What this shows is that Sasse is indeed strictly correct that the share of teens in the July labor force has fallen over timer. But teens haven't swapped out work for idleness. They're now far more likely than in the past to be enrolled in school in July, so much so that the total proportion of teens who are either working or enrolled has been relatively stable since 1976, though it fell in the wake of the early-80s, 1990, 2001, and 2008 recessions. Virtually all of this enrollment growth has been in full-time enrollment.
NOTE: Participation pre-1994 adjusted for CPS redesign per Polivka & Miller (1998)
SOURCE: IPUMS monthly CPS extract, @ernietedeschi

Perhaps even more interestingly, this shift towards more summer school enrollment is not limited to just upper-income families, as one might expect. On average, teens belonging to households in every earnings quintile were more likely to be enrolled in July over the 2014-16 period versus the 1994-96 period. And while it's still the case that teens in top-20% households are the most likely to be in the labor force in July, teens in the middle quintile--households in the 40-60th percentile of earnings--are now the most likely to be enrolled in July.

"Q1" = bottom 20% / quintile. "Q5" = top 20% / quintile
Not adjusted for household size
NOTE: Weekly earnings adjusted for top-coding based on methodology of Schmitt (2003)
SOURCE: CPS, @ernietedeschi

Whether you're relieved or alarmed by these findings probably has to do with your prior beliefs about how valuable, or substitutable, school is relative to work. The literature on the benefits of teen employment are mixed and contextual, while the benefits of education are, in broad strokes, fairly clear. Speaking from my own perspective: if my children were faced with a choice between learning to code over the summer versus, per Sasse's experience, detasseling corn and other manual labor that is now done by machine, I'd lean hard on them to take the coding classes.

But that may not be the choice being faced by teens here. There's a lot the data don't tell us about these summer enrollees. We don't know if they're taking high school or college summer courses, or attending SAT test prep sessions. We don't know if they're learning valuable new skills on the margins, or knocking off curriculum requirements so they can have easier schedules during the school year.

And of course, teens may not face a choice at all. Increased college enrollment is rightfully lauded, but it may bring with it greater academic obligations on teens that crowd out their summers, and it would be reasonable to question how necessary this is. Since teens are generally low-skill and low-experience, their employment is particularly sensitive to recessions, broader structural changes, and the minimum wage.  And crucially, we can't even rule out that this is just survey error, and that households are erroneously marking off more teens as enrolled in July simply because more teens writ large are enrolled in school in non-summer months.

So further analysis is merited and we should be cautious about jumping to conclusions. But rather than accepting Sasse's framing out of hand that the decline in teenage summer work is a pure negative, we should ask more questions about why teens are apparently in school more over the summer, and weigh the value of that change.

Personally, I learned far more about actual hard work--versus just unpleasant work--from school rather than my summer jobs. You'd be right to point out that that's not surprising coming from an economist. Then again, maybe it also shouldn't surprise us that it's a successful US senator extolling the value of unpleasant work.

UDPATE #1 (July 31): The possibility that the rise in enrollment is driven by survey error has been nagging me, mainly because of the sheer magnitude of the shift.

Here's the question about enrollment in the Current Population Survey (CPS) that is the basis for the data I'm using:

As you can see,  parents are supposed to respond that their kids are not enrolled if they're on summer vacation. One might argue the wording is confusing because parents are supposed to answer "yes" if teens are on "holiday" or "seasonal" vacation, which refers to e.g. winter or spring breaks. Perhaps summer vacation could be misinterpreted as a "seasonal" vacation. But this at least alleviates some of my nagging skepticism because the guidance is there.

It's also important to keep in mind that households fill out the CPS many times: once a month for four months, then a year hiatus, and then another four months after that. So another possible source of error is inertia in the answers: households just going through and answering the same as they did before, even though the circumstances change for some questions (like their kids' enrollment).

Luckily, there's a way to account for inertial error: we can limit our analysis to just households who are responding to the CPS for the first time (in data parlance, their month-in-sample or MIS equals 1). When we do that, the results don't change meaningfully.

So at least we can take comfort that this specific type of survey error is not bearing on the results, though we can't yet rule out other types of error.

UDPATE #2 (July 31): The rise in enrollment is predominantly in high school classes, though both high school and college have seen a rise.

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