Do Human Capital Decisions Respond to the Returns to Education? Evidence from DACA

Working Paper No. 24315 This paper studies the human capital responses to a large shock in the returns to education for undocumented youth. We obtain variation in the benefits of schooling from the enactment of the Deferred Action for Childhood Arrivals (DACA) policy in 2012, which provides work aut...

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Bibliographic Details
Published inNBER Working Paper Series p. 24315
Main Authors Kuka, Elira, Shenhav, Na'ama, Shih, Kevin
Format Paper
LanguageEnglish
Published Cambridge National Bureau of Economic Research, Inc 01.02.2018
Subjects
Deferred Action for Childhood Arrivals
Economic theory
Education
Human capital
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Summary:Working Paper No. 24315 This paper studies the human capital responses to a large shock in the returns to education for undocumented youth. We obtain variation in the benefits of schooling from the enactment of the Deferred Action for Childhood Arrivals (DACA) policy in 2012, which provides work authorization and deferral from deportation for high school educated youth. We implement a difference-in-differences design by comparing DACA eligible to non-eligible individuals over time, and we find that DACA had a significant impact on the investment decisions of undocumented youth. High school graduation rates increased by 15 percent while teenage births declined by 45 percent. Further, we find that college attendance increased by 25 percent among women, suggesting that DACA raised aspirations for education above and beyond qualifying for legal status. We find that the same individuals who acquire more schooling also work more (at the same time), counter to the typical intuition that these behaviors are mutually exclusive, indicating that the program generated a large boost in productivity.
ISSN:0898-2937
DOI:10.3386/w24315