Does Legal Status Matter for Educational Choices? Evidence from Immigrant Teenagers

Abstract

Of the estimated 11.1 million undocumented immigrants in the U.S., 1.1 million are children. Due to differential treatment in the labor market, teenage undocumented immigrants face low returns to schooling. To measure the effect of legal status on the educational choices of Hispanic teenagers, we compare siblings who differ in their legal status due to their birth country. We find that teenagers who were born in Mexico are 2.7 percentage points more likely to be out of school than their U.S.-born siblings. Alternative explanations, such as differences in prenatal or childhood environment, appear largely unable to explain this result, suggesting that legal status has a significant impact on schooling decisions. After accounting for these alternative explanations to the extent possible and using proxies for legal status in U.S. Census, our results suggest that being undocumented roughly doubles high school students' dropout rate relative to their U.S.-born siblings, with substantial wage decreases implied by back-of-the-envelope calculations.

Keywords: Demand for schooling, human capital, immigration

JEL Classification: I21, I28, J61, F22