How Did the Threat to End DACA Change the Lives of Its Recipients?

Amuedo-Dorantes and Wang (2026) examined whether the economic and social benefits of the Deferred Action for Childhood Arrivals (DACA) program persisted after the Trump administration’s 2017 effort to end the program created prolonged policy uncertainty. They analyzed 2008–2022 American Community Survey data (excluding 2020) using difference-in-differences and event-study methods to compare DACA-eligible and ineligible undocumented immigrants. They found that early labor market gains weakened substantially. Wage employment increased by 3.8 percentage points during 2013–2016 but fell to a statistically insignificant 0.3-point increase after 2017, while earnings shifted from a 29.7% increase to a 19.9% decline. Education, health insurance, and in-state mobility proved more resilient.

Why This Article Was Selected for The Policy Scientist

Immigration policy remains one of the most consequential areas of public policy because legal status influences labor markets, educational attainment, health care access, geographic mobility, and long-term economic integration. Understanding not only the effects of policy adoption but also the consequences of policy uncertainty is increasingly important as governments rely more frequently on temporary administrative actions rather than permanent legislation. This article is therefore especially timely given the continued legal uncertainty surrounding DACA. Amuedo-Dorantes has made numerous influential contributions to this literature, and this study extends earlier research by examining whether initial gains persisted under prolonged uncertainty. The nationally representative American Community Survey provides a strong empirical foundation, and the findings are likely relevant to other countries that use temporary legal protections. The difference-in-differences and event-study designs represent credible causal inference approaches and substantially strengthen the study beyond what conventional multivariate regression alone could provide.

Full Citation and Link to Article

Amuedo-Dorantes, C., & Wang, C. (2026). DACA’s uncertain path: How policy threats reshape economic and social gains for recipients. Journal of Policy Analysis and Management, 45, e70109. https://doi.org/10.1002/pam.70109

Central Research Question

Amuedo-Dorantes and Wang examine whether the economic and social benefits generated by the Deferred Action for Childhood Arrivals (DACA) program persisted after the Trump administration’s 2017 attempt to terminate the program created sustained legal and political uncertainty. Rather than simply asking whether DACA improved employment, education, or health insurance, they investigate whether those gains endured, weakened, or shifted as recipients faced increasing uncertainty about the program’s future. The study therefore moves beyond estimating DACA’s initial effects to examine how policy instability changes individual behavior over time. The authors also explore whether responses differed across labor markets, education, health insurance, and geographic mobility, and whether supportive policy environments, such as sanctuary states or areas with stronger DACA networks, moderated these effects.

Previous Literature

Previous research consistently concludes that DACA generated meaningful short-term improvements for eligible immigrants. Earlier studies found higher employment rates, improved earnings, greater occupational mobility, increased access to professional licenses, expanded employer-sponsored health insurance, and reductions in poverty. Other researchers documented improvements in educational attainment, although evidence regarding schooling has been somewhat mixed. Some studies found increased high school completion and college attendance, whereas others concluded that greater employment opportunities encouraged recipients to leave school earlier.

The literature has also shown that DACA improved broader measures of well-being. Prior studies reported better physical and mental health, increased health insurance coverage, improved outcomes for recipients’ children, higher rates of homeownership, and greater residential mobility. Several researchers further argued that temporary legal protection encouraged longer-term planning by allowing recipients to invest in education, employment, and other future-oriented activities.

Despite this substantial body of evidence, relatively little research has examined whether these gains survived the prolonged legal uncertainty that followed the Trump administration’s 2017 rescission announcement. Most studies addressing the Trump period focused narrowly on health outcomes or psychological well-being rather than evaluating a broad set of economic and social outcomes over an extended period. Consequently, little evidence existed regarding whether DACA’s early benefits represented permanent improvements or whether they deteriorated once recipients faced uncertainty regarding the program’s continuation.

This study addresses that gap by following DACA’s effects through 2022 while examining multiple outcome domains using a unified empirical framework. It therefore contributes to the literature by distinguishing between outcomes that proved durable and those that eroded under sustained legal uncertainty.

Data

The analysis relies on the American Community Survey (ACS) covering the years 2008 through 2022, excluding 2020 because the COVID-19 pandemic substantially disrupted labor markets and social conditions. The ACS provides a nationally representative sample covering approximately one percent of the United States population annually, making it one of the largest and most reliable sources of demographic and socioeconomic information available for policy research.

The authors construct a treatment group consisting of likely undocumented immigrants who satisfied DACA eligibility requirements based on age, arrival date, educational qualifications, and citizenship characteristics. They refine this sample by applying the Borjas methodology to reduce contamination from immigrants who were likely to possess legal status. The comparison group consists of likely undocumented immigrants who were ineligible for DACA but otherwise shared similar characteristics. To improve comparability over time, the authors restrict the comparison group each year to the same age range as DACA-eligible individuals, thereby preventing age-related changes from biasing the estimates.

The ACS contains detailed information on employment, earnings, educational attainment, school enrollment, health insurance coverage, migration patterns, demographic characteristics, English proficiency, marital status, and years lived in the United States. The breadth of these measures allows the authors to examine multiple dimensions of economic and social integration using a single nationally representative dataset.

Methods

The authors employ a difference-in-differences design combined with event-study analysis, both of which represent well-established causal inference approaches. Difference-in-differences compares changes experienced by DACA-eligible immigrants with changes among otherwise similar DACA-ineligible immigrants before and after policy implementation. The design is further extended by distinguishing between the Obama administration period (2013-2016), when DACA operated with relative stability, and the Trump administration period (2017-2022), when legal uncertainty increased substantially following the rescission announcement.

The event-study analysis complements the difference-in-differences estimates by examining treatment effects year by year. This approach allows the authors to evaluate the critical parallel trends assumption while identifying the timing of DACA’s effects. Their event-study estimates indicate no systematic differences between treatment and comparison groups before DACA’s implementation, strengthening the credibility of the causal interpretation.

The statistical models include extensive controls for demographic characteristics, including age, education, marital status, race, English proficiency, years since immigration, country of birth, state fixed effects, year fixed effects, state-specific time trends, and flexible age-by-year fixed effects. Standard errors are clustered at the state level. Together, these modeling decisions substantially strengthen internal validity and reduce the likelihood that observed differences reflect unrelated demographic or policy changes.

Findings/Size Effects

The findings reveal a clear distinction between DACA’s early benefits and the consequences of subsequent policy uncertainty. During the Obama administration, DACA significantly improved labor market outcomes. Wage employment increased by approximately 3.8 percentage points relative to the comparison group, while earned income increased by approximately 29.7 percent using the inverse hyperbolic sine transformation. Employer-sponsored health insurance also increased modestly during this period.

These labor market gains largely disappeared following the Trump administration’s 2017 rescission announcement. The estimated increase in wage employment declined to only 0.3 percentage points and was no longer statistically significant. Earnings shifted dramatically from a statistically significant 29.7 percent increase during the Obama years to an estimated 19.9 percent decline during the period of heightened uncertainty. Self-employment also declined significantly after 2017, suggesting that legal uncertainty weakened several dimensions of labor market participation.

In contrast, several nonlabor outcomes proved considerably more resilient. Private health insurance increased significantly during the post-2017 period, while employer-sponsored insurance remained relatively stable. School enrollment and educational investment persisted despite growing uncertainty, suggesting that recipients increasingly emphasized longer-term human capital investments. Geographic mobility also changed over time, with greater in-state mobility indicating that recipients adjusted residential decisions in response to evolving policy environments.

The authors further document important geographic heterogeneity. Labor market losses were substantially smaller in sanctuary states and locations characterized by stronger DACA support networks. Conversely, declines in employment and earnings were more pronounced in areas with greater immigration enforcement activity. These findings suggest that local institutional environments partially buffered recipients from the adverse consequences of federal policy uncertainty.

Overall, the evidence indicates that policy uncertainty did not eliminate every benefit associated with DACA. Instead, it reshaped recipients’ behavior. Immediate labor market gains weakened substantially, while investments associated with longer-term planning—including education, private insurance, and residential decisions—proved more durable.

Conclusion

This study substantially advances understanding of how temporary immigration policies influence long-term economic and social outcomes. Rather than treating DACA as a single policy intervention, the authors demonstrate that its effects evolved as the surrounding political environment changed. Their findings indicate that legal uncertainty can substantially erode labor market gains while leaving other forms of investment relatively intact. Consequently, policy stability itself becomes an important determinant of program effectiveness.

Methodologically, the study represents one of the strongest evaluations of DACA published to date. The nationally representative ACS dataset, carefully constructed comparison group, difference-in-differences framework, event-study analysis, and numerous robustness checks provide a persuasive causal analysis. More broadly, the findings contribute to policy scholarship by demonstrating that temporary legal protections should be evaluated not only according to their initial effects but also according to how uncertainty surrounding their continuation influences behavior over time. These insights are relevant well beyond immigration policy because many contemporary public policies rely on temporary administrative authority rather than permanent statutory protections.