High school dropout and teen childbearing

Understanding the relationship between high school dropout and teen childbearing is complicated because both are affected by a variety of difficult to control factors. In this paper, I use panel data on aggregate dropout and fertility rates by age for all fifty states to develop insight by instrumenting for dropout using information on state policies on mandatory high school graduation exams. I then make use of these exit exam instruments in tandem with an instrument used previously in the literature to identify the impact of education on various outcomes: Compulsory schooling laws. Because these instruments operate at different margins, comparing effects provides insight into whether local average treatment effects are informative about average treatment effects relevant for a broader population than those complying with either instrument. The findings suggest that the elasticity of teen pregnancy with respect to high school dropout is 0.082 overall, with larger effects for black teens.

► I introduce a new instrument into the literature to identify the effects of dropout on teen childbearing. ► I compare treatment effects with estimates derived from compulsory schooling laws. ► I find the treatment margins of the new and traditionally derived instruments are distinct. ► The dropout elasticity of pregnancy is estimated to be 0.082 overall, with larger effects for black teens.