Does Reducing College Costs Improve Educational Outcomes for Undocumented Immigrants?
Ten states, beginning with Texas and California in 2001, have passed laws permitting undocumented students to pay the in-state tuition rate—rather than the more expensive out-of-state tuition rate—at public universities and colleges. We exploit state-time variation in the passage of the laws to evaluate the effects of these laws on the educational outcomes of Hispanic childhood immigrants who are not U.S. citizens. Specifically, we use individual-level data from the 2001-2005 American Community Surveys supplemented by the 2000 U.S. Census, and estimate the effect of the laws on the probability of attending college for 18-24 year olds who have a high school degree and the probability of dropping out of high school for 16-17 year olds. We find some evidence suggestive of a positive effect of the laws on the college attendance of older Mexican men, although in general estimated effects of the laws are not significantly different from zero. We discuss various reasons for the estimated zero effects. Two important considerations are that little time has elapsed since the state laws were passed and that unchanged federal policy on financial aid and legalization for undocumented students may dampen the state laws’ benefits. Thus, the longer-run effects of the laws may well differ from the short-run effects presented in this paper. (JEL I28, J15, J24)