Countering the Trade-Off Myth
Entering the labor market is often a difficult step for young people. Across countries, youth unemployment rates are typically around three times higher than those of adults, and many young individuals remain NEET — not in education, employment or training. In Latin America, youth unemployment reached about 14% in 2023, while nearly one in five young people were neither studying nor working. Although taking a job while in school may reduce time available for studying, it can also offer valuable work experience and an early connection to the formal labor market. Determining whether the benefits outweigh the costs is therefore central to youth employment policy.
I Study and Work
Our recent research provides the first long-term causal evidence on this issue (see Ferrando, Katzkowicz, Le Barbanchon and Ubfal, 2025). We examine Uruguay’s national Yo Estudio y Trabajo (“I Study and Work”) program, which offers part-time, year-long formal jobs to students selected through a lottery, conditional on remaining enrolled in school. By following almost 90,000 applicants for seven years, the randomized design allows the program’s effects to be credibly isolated — an unusually rigorous evaluation in this policy area.
The results point to substantial and persistent improvements in labor market outcomes. Seven years after entering the program, participants earn approximately 11% more in formal employment than comparable applicants who were not selected. These gains reflect both higher employment rates — about four percentage points — and higher monthly wages, which are roughly 6% higher. Crucially, these benefits endure well beyond the program’s duration, far beyond the two- or three-year follow-up periods typical of most job-training evaluations.
The Effects on Education
Importantly, we find no evidence that working while studying comes at the expense of education. If anything, participants complete slightly more schooling, with an average increase of about 0.27 years. Their probability of attending high school also rises for up to four years after program entry, over a period when the program’s school enrollment condition is no longer binding. The initial requirement to remain enrolled appears to help young people successfully balance work and study in the long run, illustrating that the two activities may reinforce rather than undermine each other.
The program’s benefits also extend beyond initial job placements. Over time, participants transition into a wide range of industries, suggesting that the skills, habits and experience acquired are broadly valued by employers. While the effects are strongest for men, they remain positive for women and for youth from more disadvantaged backgrounds.
A Program That Pays for Itself
From a public policy perspective, the program proves both effective and fiscally sound. Despite relatively high upfront costs, our cost-benefit analysis shows that the program pays for itself through increased tax revenues by the time participants reach their mid-40s. Its long-term return to public funds is comparable to that of some of the most successful early-childhood interventions, which is remarkable for a youth labor market policy.
Overall, our findings show that well-designed work-study programs can meaningfully improve young people’s employment prospects and earnings over the long run, while preserving — and even enhancing — their educational trajectories. In contexts where the transition from school to work is particularly uncertain, Uruguay’s experience highlights that combining part-time work with continued schooling can generate durable benefits for both individuals and society. Similar approaches could yield lasting benefits elsewhere, provided they ensure job quality, close integration with education and strong employer involvement.
