Implications of middle school behavior problems for high school graduation and employment outcomes of young adults: Estimation of a recursive model

The potentially serious adverse impacts of behavior problems during adolescence on employment outcomes in adulthood provide a key economic rationale for early intervention programs. However, the extent to which lower educational attainment accounts for the total impact of adolescent behavior problems on later employment remains unclear. As an initial step in exploring this issue, we specify and estimate a recursive bivariate probit model that (1) relates middle school behavior problems to high school graduation and (2) models later employment in young adulthood as a function of these behavior problems and of high school graduation. Our model thus allows for both a direct effect of behavior problems on later employment as well as an indirect effect that operates via graduation from high school. Our empirical results, based on analysis of data from the National Educational Longitudinal Study, suggest that the direct effects of externalizing behavior problems on later employment are not significant but that these problems have important indirect effects operating through high school graduation.