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

Abstract

This paper studies human capital responses to the availability of the Deferred Action for Childhood Arrivals (DACA) program, which provides temporary work authorization and deferral from deportation for undocumented, high-school-educated youth. We use a sample of young adults that migrated to the United States as children to implement a difference-in-difference design that compares noncitizen immigrants (“eligible”) to citizen immigrants (“ineligible”) over time. We find that DACA significantly increased high school attendance and high school graduation rates, reducing the citizen-noncitizen gap in graduation by 40 percent. We also find positive, though imprecise, impacts on college attendance. (JEL H52, I21, I26, J13, J15, J24)

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