Does Peer Motivation Influence Schooling Investments? Evidence from DACA

This study examines the spillover effects of Deferred Action for Childhood Arrivals (DACA). DACA provides legal protection and work permits to undocumented youth conditional on high school completion. This policy significantly increased the returns to schooling for undocumented youth, leaving the returns for everyone else unchanged. Following the introduction of DACA, educational attainment and achievement in school among undocumented youth increased significantly. Leveraging administrative data from Los Angeles schools and variation in the concentration in DACA-eligible youth across schools, I also find significant positive effects of DACA on high school completion and student achievement among ineligible peer groups. These findings suggest that focusing only on the direct impacts of immigration policies such as DACA are likely to underestimate the true benefits to society.