WP 22-22/R – Teens make important decisions about schooling and employment that impact their life trajectories. Moderate driving restrictions for teens reduce high school dropout rates. This reduction does not represent substitution away from employment.
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A previous version of this working paper was originally published in August 2022.
The authors provide evidence that graduated driver licensing (GDL) laws, originally intended to improve public safety, impact human capital accumulation. Many teens use automobiles to access both school and employment. Because school and work decisions are interrelated, the effects of automobile-specific mobility restrictions are ambiguous. Restricting teen mobility significantly increases short-run schoolgoing and long-run educational attainment while reducing teen employment. The authors develop a multiple discrete choice model that rationalizes unintended consequences and reveals that school and work are weak complements. Thus, improved educational outcomes reflect decreased access to leisure activities rather than reduced labor market access.
