SummaryThis paper examines the disaggregated components of Australian teenage labour force participation rates for males and females, for part‐time and full‐time participants and for those still at school. The paper also examines school participation rates for the same group of teenagers. Data are analysed for the period 1978 quarter 1 to 1987 quarter 2. In line with previous research, labour market demand factors are found to be major explanators of participation rates, but supply side effects due to the government's secondary school student allowance and also unemployment benefits are found to be important determinants of work and schooling decisi