Association for Public Policy Analysis & Management

In 2011, only 60 percent of students in Los Angeles schools completed high school (15 percentage points below the national average). There are many reasons why students may choose to drop-out of high school (e.g. instability at home, lack of motivation, trouble in school), but understanding how each factor contributes individually is challenging because students typically experience many of these factors simultaneously. One factor that may contribute to students’ educational attainment decisions is their peers. In schools with high dropout rates, some students may choose low levels of educational attainment because there is peer pressure to do so. The role of peers has been found to be important in many other educational contexts. Although it is generally believed that peers also play an important role on students’ important educational attainment decisions, there is very little empirical evidence in support of this. This is, in large part, because settings in which peer groups change exogenously when students make these decisions is rare.

In this paper, I identify the impact of attending high school with peers more motivated to complete school by exploiting the introduction of Deferred Action for Childhood Arrivals (DACA). DACA provides legal protection and work permits to undocumented youth conditional on high school completion, and has led to an increase in the number of undocumented youth completing high school. Importantly this policy change increased the returns to a high school completion for undocumented youth, leaving the returns for documented youth unchanged. Leveraging administrative data from Los Angeles schools and variation in the concentration in DACA-eligible youth across schools, I use a difference-in-difference strategy that compares outcomes of students with more DACA-eligible peers to those with less, before and after DACA’s enactment.

After DACA’s enactment, students with higher concentrations of DACA-eligible peers are significantly more likely to complete high school and improve standardized test performance. At the average campus with 3 percent of likely DACA-eligible students, DACA’s enactment led to a 2 percentage point increase in the likelihood of completing high school and a .07 standard deviation increase in standardized test performance. Furthermore, I find that those likely to be DACA-eligible are more likely to complete high school and perform better on standardized exams. Given that DACA increased the academic effort of undocumented youth, the most likely mechanism for positive peer impacts may relate to the desire to conform to updated peer group norms where educational attainment is more valued.

This paper extends the small literature on the role peer culture play on educational attainment (Abramtizky et. al 2018) and provides the first causal estimates on whether peer motivation influences high school completion in a large urban low-performing school district. Second, this paper builds on previous work focused on policies targeted to undocumented youth (Amuedo-Dorantes and Sparber, 2014; Kuka et. al 2018) by not only addressing the direct impact of such policies on undocumented youth in an important setting, but also by measuring the extent to which peers of undocumented youth may also be impacted by these policy changes.