Panel Paper: Education and Labor-Market Effects of Being Undocumented: Evidence from DACA

Saturday, November 9, 2019
Plaza Building: Concourse Level, Governor's Square 14 (Sheraton Denver Downtown)

*Names in bold indicate Presenter

Jorge E. Encinas, Harvard University and Matthew Patrick Shaw, Vanderbilt University

The Deferred Action for Childhood Arrivals (DACA) program created by the Obama Administration in 2012 gave the opportunity for undocumented immigrants who meet certain eligibility criteria to receive a reprieve from deportation and a work permit. This paper estimates the effect of DACA on the educational-attainment and labor-market outcomes of undocumented youth. Using data from the American Community Survey (ACS), we estimate the effect of this policy on undocumented individuals’ high school graduation, postsecondary enrollment and completion, participation in the formal labor market, and reported wages. While recent papers have attempted to estimate the effect of DACA, this paper introduces an innovation to studies of DACA effects and to the econometric study of policies affecting undocumented individuals in general.

In separate regression discontinuity designs, we exploit the DACA policy’s strict age, immigration-age, and immigration-year requirements as running variables that allow us to compare outcomes for individuals just that are just eligible for DACA to those that are just ineligible. To improve the precision of our estimates, we also incorporate an innovation one of the authors introduces in an earlier study: the use of an undocumented weight in our estimates. Though federal data do not ask residency status directly, they are known to capture undocumented immigrants among participants. By weighting observations of non-citizen immigrants by a ratio estimate of the total undocumented population from a country or region, we are able to provide more precise estimates of the DACA policy on likely undocumented immigrants. This strategy also facilitates the study of national-origin variation undocumented populations.

Preliminary results suggest that being eligible for DACA had negative effects on educational attainment among undocumented individuals, while positively affecting labor-market participation among older undocumented immigrants. However, we observe smaller negative effects on bachelor's and associate degree attainment for undocumented college students, indicating that they are not dropping out of college to pursue newly available employment opportunities. While more research is needed to understand the relationship between labor-force participation and the pursuit of education, these results suggest that policies focused on providing work permits for undocumented immigrants may not directly encourage improved educational attainment.