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I provide a descriptive overview of the employment and earning behavior of the NLSY97 youths and test for the effects of both family and individual characteristics and federal and state laws upon their behavior. Nearly half of all youths (47 percent) earned income in 1996. Results indicate that minimum wages reduce the probability of labor force participation for female youths aged 14-16, while subminimum wage certificate programs (allowing students to work at wages below the minimum wage) help mitigate the disemployment effects of minimum wages.

I describe and assess the quality of the parental transfer data from the NLSY97 and test for the determinants of parental allowances. The median annual allowance received by youths aged 12-16 in 1996 was $260, the equivalent of $5 per week. Surprisingly, black youths are more likely to receive allowances, and to receive higher allowances, than non-black, non-Hispanic youths. Reduced-form estimations also indicate that allowances depend upon parents' wherewithal, given the effects of parents' income and the number of siblings upon allowances.

Finally, I present an altruism model of youths' earnings and parental transfers where the parent does not directly control the child's earnings. Using a tobit two-stage procedure, I find that youths earn less the greater their allowances, and that parents decrease allowance amounts in response to youths' decisions to earn more. It is also important to allow earnings and allowances to be jointly determined in order to assess the effects of family and individual characteristics upon earnings and allowances. For example, allowances conditional upon earnings do not depend directly upon being black. Therefore, black parents apparently compensate their children for having a lower probability of labor force participation.