Working Paper

Driving, Dropouts, and Drive-Throughs: Mobility Restrictions and Teen Human Capita

Abstract: We provide evidence that graduated driver licensing (GDL) laws, originally intended to improve public safety, impact both high school completion and teen employment. Many teens use automobiles to commute both to school and to employment. Because school and work decisions are interrelated, the effects of automobile-specific mobility restrictions are ex ante ambiguous. Combining variation in the timing of both GDL law adoption and changes in compulsory school laws into a triple-difference research design shows that restricting teen mobility significantly reduces high school dropout rates and teen employment. These findings are consistent with a model in which teens use automobiles to access educational distractions (employment or even risky behaviors). We develop a discrete choice model that reflects reduced access to school, work, and other activities, which reveals that limiting access to work alone cannot explain the reduction in high school dropout rates.

Keywords: Mobility Restrictions; Human Capital; Teen Employment; GDL Laws; Multiple Discreteness;

JEL Classification: J24; I20; J22; R48; C35;

https://doi.org/10.21799/frbp.wp.2022.22

Bibliographic Information

Provider: Federal Reserve Bank of Philadelphia

Part of Series: Working Papers

Publication Date: 2022-08-17

Number: 22-22