Youth Employment and Financial Access: Does Work in High School Improve Downstream Financial Capability?

ABSTRACT For many teenagers, a first job marks an important milestone that may improve later life outcomes. However, limited research has considered the effect of youth employment on personal finances. This study offers evidence on the relationship between working in high school and financial access in young adulthood using data from the National Longitudinal Survey of Youth 1997. Employing an empirical model that addresses selection into youth employment, study findings reveal that young adults who worked in high school are more likely to access a range of financial products and services for transacting, saving, and borrowing by age 25. The extent to which youth employment facilitates financial access varies by demographic characteristics, including race and ethnicity, sex, and parent educational attainment. Young adults who worked during high school did not exhibit significant improvements in financial management behavior despite gains in financial access relative to their non‐working peers. These findings are consistent with policies and programs that support youth who engage in work early in life.