Learning and earning: payoffs and tradeoffs of early entry into the labor force in Colombia

Abstract

This paper analyzes the effects on adult earnings of child and youth labor forcé participation. The models consider the age at entry into the labor force, as well as the combination of work and school. Differences across genders, and across salaried and self-employed workers are considered. The analysis uses a human capital framework. The data come from a household survey undertaken by the National Statistical Administrative Department of Colombia (DANE, Departamento Administrativo Nacional de Estadística) in Bogota, Colombia in 1991. The results suggest that there is a payoff to delayed entry into the labor force, and a tradeoff between work and schooling. The return to a year of education is reduced when schooling is combined with work The lower return to education is partially offset by the return to experience, and the net effect is related to the level of schooling. The returns to attending school exceed the returns to dropping out of school and working. This is true of both the returns to a year of schooling combined with work, and to a year dedicated entirely to schooling.