Shall we encourage students to work while in school? We provide evidence by leveraging a one-year work-study program that randomizes job offers among students in Uruguay. Using social security data matched to over 120,000 applicants, we estimate an increase of 9% in earnings and of 2 percentage points in enrolment over the four post-program years for treated youth. Survey data indicate that enrolled participants reduce study time, but this does not translate into lower grades. Students mainly substitute leisure and household chores with work. A decomposition exercise suggests that work experience is the main mechanism behind the increase in earnings.
Written with Thomas Le Barbanchon (Bocconi University) and Federico Araya (Uruguayan Ministry of Labor and Social Security)