Education, crowding-out, and Black-White employment in youth labor markets: Evidence from No Pass, No Drive policies

Abstract

We study how education affects Black and White youth employment in the context of No Pass, No Drive (NPND) policies, which require that teens attend school to hold drivers' licenses. Using difference-in-differences estimation, we find that NPND policies increase Black teen employment by 6.7 p.p. without affecting labor force participation (LFP), while reducing White teen employment and LFP by 8.3 p.p. and 5.9 p.p., respectively. We find similar, but smaller effects for Black and White adults ages 18–25. By increasing school enrollment, NPND policies cause White youths to exit the labor force, increasing labor market tightness and improving job finding for Black youths.