High School Dropout and Teen Childbearing

In this paper I examine the relationship between high school dropout and teen childbearing. Understanding this relationship is complicated because both phenomena are likely affected by a variety of difficult to control factors. Using a panel data on aggregate dropout and fertility rates by age for all fifty states, I attempt to develop insight by instrumenting for dropout using information on state policies on mandatory high school graduation exams. I then make use of the set of exit exam instruments in tandem with an instrument used previously in the literature to identify the impact of education on a variety of outcomes: Compulsory schooling laws. Because these instruments operate at different margins, comparing effects estimated provides insight into whether local average treatment effects identified 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 0.13 for white teens and 0.25 for black teens.