THE CHOICE BETWEEN LEGITIMATE AND ILLEGITIMATE WORK: MICRO STUDY OF INDIVIDUAL BEHAVIOR

Llad Phillips and Harold L. Votey

Contemporary Economic Policy, 1987, vol. 5, issue 4, 59-72

Abstract: This study postulates that youths remain in the labor force so long as the number of weeks they have employment exceeds the number they consider as minimally acceptable. Such a threshold level of weeks worked can be related to the notion of a reservation wage. Prior employment or experience raises expectations and should increase the threshold. Other factors, such as illegal opportunities to earn income, may also raise the threshold. If the actual fraction of weeks a youth works exceeds this threshold, then we expect that youth to be employed during the following period. We compare data for individuals of both sexes, age 16 or 17 years, from the Youth Cohort of the National Longitudinal Survey regarding the behavior of those who dropped out of school, those in the process of dropping out of school, and those remaining in school. Involvement in crime decreases the likelihood of future employment–most for dropouts and least for those remaining in school.

Date: 1987
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