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

Elira Kuka (), Na'ama Shenhav and Kevin Shih ()

No 1802, Departmental Working Papers from Southern Methodist University, Department of Economics

Abstract: 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.

Keywords: Returns to education; schooling; fertility; amnesty; undocumented immigrants (search for similar items in EconPapers)
JEL-codes: I20 I26 J1 J13 (search for similar items in EconPapers)
Date: 2018-02
New Economics Papers: this item is included in nep-edu and nep-lab
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Related works:
Journal Article: Do Human Capital Decisions Respond to the Returns to Education? Evidence from DACA (2020) Downloads
Working Paper: Do Human Capital Decisions Respond to the Returns to Education? Evidence from DACA (2018) Downloads
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