Effects of in-State Tuition on Undocumented Immigrants' Education and Future: A Synthetic Control Approach

Background and Purpose: College education is critical in determining future labor market outcomes. But immigration status can often create barriers to higher education especially for young undocumented immigrants. North Carolina, Arizona, Georgia, South Carolina, Alabama, Indiana, and Colorado, during some time period, explicitly banned offering in-state tuition subsidies to undocumented immigrants. States such as New York and Illinois, etc. offer undocumented immigrants in-state tuition. And states including California and Washington, etc. offer undocumented immigrants in-state tuition and financial aid. This paper aims to examine the effect of the in-state tuition on undocumented young adults’ educational outcomes and labor market outcomes.

Methods: The study uses the Current Population Survey data from 1994 to 2016. The key independent variable is the states’ in-state tuition policy in a given year. The key outcome variables include undocumented young adults’ college enrollment, education attainment, earnings, work hours, and occupation types. I use a guideline from the Department of Homeland Security data to create criteria to impute a relatively precise sample of undocumented immigrants. I first use state and year fixed effect to estimate the effects using individual level data. Synthetic control methods are then applied to infer the effect of the policy on the interested outcomes. I use states that ban in-state tuition and states that offer in-state tuition and/or financial aids as two separate treatment groups. I use all the other states as donor pool to generate synthetic controls.

Results: Both methods show that banning in-state tuition had significant negative effects on undocumented young adults’ enrollment and education attainment. While offering in-state tuition and/or financial aid had positive effect on educational outcomes. However, labor market outcomes do not vary significantly between undocumented young adults living in states with different in-state tuition policies. Compared to citizens and legal residents, the gaps in the outcomes remain large, especially for labor market outcomes.  

Conclusion and Implications: In-state tuition policies appear to affect undocumented young adults’ educational behaviors in meaningful ways. However, the policy does not offer valid pathway for undocumented immigrants to improve earnings and access to professional or managerial occupations. Providing in-state tuition and financial aid did not significantly pull out undocumented immigrants from jobs that are paying below minimum wage. The results offer implications for policy makers to think about more comprehensive and consistent ways when making immigration related policies. While increasing access to higher education is a good start. It would become less meaningful if undocumented immigrants do not have a legal path to capitalize the degrees in labor market.