Teenagers: Employment and Contributions to Family Spending

Article excerpt

Approximately one-third of all teenagers were employed some time during 1997-98; a closer look into family income and expenditures reveals that many of those working teens do not seem to work to contribute toward family necessities

As most parents with teenagers know, their children between the ages of 14 and 17 receive a major portion of family income. The latest U.S. Department of Agriculture estimates of family expenditures on children indicate that middle-income families spend between $9,390 and $9,530 per year on the typical teenager.(1) Although teenagers are a major expense, they can offset some of their expense and even contribute toward their family's economic well-being by attaining employment in the labor market and contributing to the family budget. According to a recent report by the Department of Labor, 2.9 million youths aged 15 to 17 worked during the school months, and 4.0 million youths worked during the summer months, over the 1996-98 period.(2)

Previous research on teen employment has primarily focused on the incidence and patterns of work, and the effects on the teenager's educational attainment, future ,employment prospects, and other developmental outcomes.(3) Some of this research suggests that teenage employment can have detrimental effects, such as lower educational attainment. J.G. Bachman suggests that employment provides youths with "premature affluence."(4) One marketing study suggests that in 1999 teens spent $105 billion of their own money and influenced $48 billion in family spending.(5)

Although previous research has examined the association of husbands' and wives' labor force participation with family expenditures, little research has been undertaken on the connection between the employment status of teenagers and family expenditures.(6) This article does just that. It examines the role that employed and nonemployed teenagers play in family expenditures. It specifically looks at the percentage of teenagers who are employed and not employed, and the characteristics of each. This is done by income level because children from low-income families may be more likely to contribute to family economic well-being than children from nonlow-income households. Low-income households are defined as families with before-tax income below 200 percent of the poverty threshold; this income includes that earned by all family members, including employed teens.(7) In addition, the association of teen employment with major family expenses is analyzed by testing whether teen employment is associated with more or less money spent on certain types of expenses, while controlling for other factors.

Data

Data used for this study are from the interview component of the 1997-98 Consumer Expenditure (CE) Survey, collected by the Bureau of the Census for the Bureau of Labor Statistics. The CE is an ongoing study that collects data on expenditures, income, and major sociodemographic characteristics of households.(8) It is the most comprehensive source of information on household expenditures available at the national level. A national sample of households, representing the civilian noninstitutionalized population, is interviewed over the course of a year. The 1997-98 survey contains information from approximately 44,000 interviews.(9)

Teens, aged 14 to 17, were selected for this analysis. The unweighted sample consisted of 2,552 teens. This sample was restricted to teenagers who were children of the household head and to households who were complete income reporters. Complete income reporters are households that provide values for at least one major source of income such as wages and salary, self-employment income, and Social Security. For the descriptive analysis of teen characteristics, each teenager was analyzed separately. About 19 percent of households contained more than one teenager. For the descriptive analysis of household expenditures, each household was analyzed separately. …