Laura M. Argys, Thomas A. Mroz, and M. Melinda Pitts
Working Paper 2019-16a
July 2019 (Revised August 2025)
Full text 
Teen labor force participation (LFP) in the United States has declined dramatically over the past two decades, but the causes are not well understood. This research examines the role widespread graduated driver licensing restrictions for novice drivers has played in this decline. Although adopted in response to a high incidence of motor vehicle accidents among teens, these restrictions may have altered the labor-leisure trade-off for teens by increasing the cost of obtaining a license and reducing the benefits of driving. The results suggest that state-level variations in the severity of driving restrictions heterogeneously affect teen LFP and that the impacts vary by gender. On average, approximately 40 percent of the decline in teen LFP since 1995 can be attributed to driving restrictions.
JEL classification: J22, I18, H7
Key words: graduated driver licensing, teen labor force participation, driving restriction
https://doi.org/10.29338/wp2019-16
The views expressed here are the authors' and not necessarily those of the Federal Reserve Bank of Atlanta or the Federal Reserve System. Any remaining errors are the authors' responsibility.
Please address questions regarding content to Laura M. Argys, College of Liberal Arts and Sciences, University of Colorado, Denver, CB 181, P.O. Box 173364, Denver, CO 80217-3364, laura.argys@ucdenver.edu; Thomas A. Mroz, Georgia State University, Department of Economics, P.O. Box 3992, Atlanta, Georgia 30302-3992, tmroz@gsu.edu, or M. Melinda Pitts, Federal Reserve Bank of Atlanta, Research Department, 1000 Peachtree Street NE, Atlanta, GA 30309-4470, 404 498-7009, melinda.pitts@atl.frb.org.
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