Munich Personal RePEc Archive

Education, Crowding-out, and Black-White Employment Gaps in Youth Labor Markets: Evidence from No Pass, No Drive Policies

Kennedy, Kendall and Shen, Danqing (2020): Education, Crowding-out, and Black-White Employment Gaps in Youth Labor Markets: Evidence from No Pass, No Drive Policies.

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Abstract

We study how educational attainment and school enrollment status differentially affect Black and White teen part-time employment in the context of No Pass, No Drive policies. These policies require that teens maintain enrollment and regular attendance in school in order to hold a driver’s license, and previous research (Barua and Vidal-Fernandez 2014; Kennedy 2020) shows they cause large increases in school enrollment and educational attainment. Using difference-in-differences estimation, we find that No Pass, No Drive policies cause a 5 percentage point increase in Black teen part-time employment, but do not cause an associated change in White teen employment. Rather, this increase in Black teen part-time employment is offset by a 1.7 percentage point decrease in part-time employment for White young adults (aged 18-25). Event study specifications show that these patterns are driven by long-term compositional changes in the young adult workforce. There are no immediate effects of No Pass, No Drive policies on employment, but these policies cause an increase in the educational attainment of teens, who then become less likely to accept part-time work as young adults. This evidence suggests substantial “crowding out” of Black teens by young adults in part-time work, and that efforts to promote full-time work or post-secondary school attendance for young adults may additionally aid Black teens in part-time job finding.

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