Teen workers: Where do their earnings go?

Feb 8, 2014

Credit Morguefile

Most teen workers spend instead of save.

That's according to a new University of Michigan study of 49,000 high school seniors from 1981 through 2011.  It's based on the Monitoring the Future study conducted annually by the University's Institute for Social Research.

The study found that the majority of high school workers spend at least half their pay on personal items like clothes, music, and eating out. And that hasn't changed in 30 years.

The study says the percentage of 12th-graders who devote at least half their pay to college savings has held steady over 30 years, at about 17%. And the percentage of high school seniors who contribute at least half their earnings to family expenses was about 13% in 2011, up a few percentage points over three decades.

One notable change has been that teens are spending less on cars.

"Kids are just more connected electronically. So they don't have to travel around as much in cars, " said the study's author, Jerald Bachman. "And their parents are a bit more likely to chauffeur them around than they were in earlier decades.

Bachman said cutbacks in drivers' education programs and tougher teen licensing may also explain the drop.

According to Bachman, another change has been a big drop in the percentage of high school seniors who work for pay, from close to 75% until 2001, to 59% in 2010.

He attributed the decrease to the economic downturn. "I don't think it's primarily because teens have lost interest in jobs," he said. "I think it's primarily because jobs are just not available."

Virginia Gordan, Michigan Radio Newsroom