Comparing the Ethnicity Proxy and Residual Method: Applications to the State-level DREAM Acts and DACA

Previous studies often use Hispanic non-citizens as a proxy to identify undocumented immigrants in survey data. This paper compares the ethnicity proxy with the residual method in identifying undocumented immigrants regarding two aspects: how closely they match official statistics and how they differ when evaluating the effects of the state-level DREAM Acts and DACA on college enrollment and labor market outcomes. This study finds that the residual method outperforms the Hispanic non-citizen proxy in matching the U.S. Citizenship and Immigration Services statistics of undocumented immigrants for a majority of variables. Consistent with the previous literature, results from both methods find that the state-level DREAM Acts increase college enrollment, while DACA decreases college enrollment and increases the probability of working. The residual method produces policy effect estimates in the same direction as does the Hispanic non-citizen proxy approach, but larger in magnitude for DACA.