The Role of Expectations In Adolescent Schooling Choices: Do Youths Respond to Economic Incentives? (original) (raw)
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The incentive structure, consequent on the institutional structure, 5ignificancly influences expectations. However, in this context, differences in individual perceptions of opportunities and capacities to pursue them broadly relate to socioeconomic background, school and community-related factors. The main finding en the relationship between expectations and post-school choice is that an overwhelming majority of students expect significant improvement in income, career opportunities, social prestige and marriage prospects regardless of intended post-school choice.
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Social Science Research, 2013
How consequential is family socioeconomic status for maintaining plans to get a bachelor's degree during the transition to adulthood? This article examines persistence and change in educational expectations, focusing on the extent to which family socioeconomic status shapes overtime trajectories of bachelor's degree expectations, how the influence involves the timing of family formation and full-time work vs. college attendance, and how persistence in expectations is consequential for getting a 4-year degree. The findings, based on the high school senior classes of 1987-1990, demonstrate that adolescents from higher socioeconomic status families are much more likely to hold onto their expectations to earn 4-year degrees, both in the early years after high school and, for those who do not earn degrees within that period, on through their 20s. These more persistent expectations in young adulthood, more so than adolescent expectations, help explain the greater success of young people from higher socioeconomic status backgrounds in earning a 4-year degree. Persistence of expectations to earn a bachelor's degree in the years after high school is shaped by stratified pathways of school, work, and family roles in the transition to adulthood.
National Bureau of Economic Research, 2010
Modeling College Major Choices Using Elicited Measures of Expectations and Counterfactuals * The choice of a college major plays a critical role in determining the future earnings of college graduates. Students make their college major decisions in part due to the future earnings streams associated with the different majors. We survey students about what their expected earnings would be both in the major they have chosen and in counterfactual majors. We also elicit students' subjective assessments of their abilities in chosen and counterfactual majors. We estimate a model of college major choice that incorporates these subjective expectations and assessments. We show that both expected earnings and students' abilities in the different majors are important determinants of student's choice of a college major. We also show that students' forecast errors with respect to expected earnings in different majors is potentially important, with our estimates suggesting that 7.5% of students would switch majors if they made no forecast errors.
Heterogeneous Beliefs and School Choice Mechanisms
2018
This paper studies how welfare outcomes in centralized school choice depend on the assignment mechanism when participants are not fully informed. Using a survey of school choice participants in a strategic setting, we show that beliefs about admissions chances differ from rational expectations values and predict choice behavior. To quantify the welfare costs of belief errors, we estimate a model of school choice that incorporates subjective beliefs. We evaluate the equilibrium effects of switching to a strategy-proof deferred acceptance algorithm, and of improving households' belief accuracy. We find that a switch to truthful reporting in the DA mechanism offers welfare improvements over the baseline given the belief errors we observe in the data, but that an analyst who assumed families had accurate beliefs would have reached the opposite conclusion.
Nber Working Paper Series Heterogeneous Beliefs and School Choice Mechanisms
2019
This paper studies how welfare outcomes in centralized school choice depend on the assignment mechanism when participants are not fully informed. Using a survey of school choice participants in a strategic setting, we show that beliefs about admissions chances differ from rational expectations values and predict choice behavior. To quantify the welfare costs of belief errors, we estimate a model of school choice that incorporates subjective beliefs. We evaluate the equilibrium effects of switching to a strategy-proof deferred acceptance algorithm, and of improving households' belief accuracy. We find that a switch to truthful reporting in the DA mechanism offers welfare improvements over the baseline given the belief errors we observe in the data, but that an analyst who assumed families had accurate beliefs would have reached the opposite conclusion. Adam Kapor Department of Economics Princeton University 280 Julis Romo Rabinowitz Building Princeton, NJ 08544 and NBER akapor@pr...
Journal of Social Issues, 2008
Individuals' expectations are strong predictors of their behaviors; educational expectations predict enrollment in postsecondary education. Yet in many cases, a youth's previous educational expectations are not met or are exceeded. This study examines correlates of educational expectations and unexpected educational attainment using longitudinal data from Monitoring the Future, a U.S. national study. Demographic characteristics, educational experiences in high school, and other risk and protective factors were related to expectations for educational attainment during high school. Logistic regressions indicated that high school curriculum, average grades, educational aspirations, and parents' educational level were particularly strong indicators of youth not meeting their expectation to graduate from a 4-year college, or graduating from college despite expecting not to graduate by age 25/26. We discuss the implications of unexpected pathways in terms of discontinuity during transitions and consider the implications for improved educational and career counseling during high school.
Subjective Expectations and Schooling Choices in Latin America and the Caribbean
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Expectations about future labour market opportunities are essential for education and labour market decisions. This paper uses data from a survey of youths in seven Latin American and Caribbean countries to explore the role of expected returns to education on schooling decisions. We find substantial variation in subjective expectations partly explained by youths' socioeconomic characteristics. Also, we find that enrolment in tertiary education is positively related to perceived education returns. Furthermore, the association of expectations with schooling choices differs across individuals in relevant domains, including gender, skills, and socioeconomic background. Our results suggest that public policies might impact choices and reduce socioeconomic gaps in schooling by providing information on education returns.
2003
Among children from poor households in marginal Mexican rural communities who finish primary school, 25% do not continue in secondary school and 8.8% of those who enter secondary school abandon after failing the first year. The ambitious Program for Education, Health, and Nutrition (Progresa) was introduced to remedy this situation, making cash payments to mothers of 2.5 million poor rural children to send them to school. Randomized treatment allows accurate impact analysis. We estimate a structural model of enrollment decisions to continue and to repeat grades in case of failure. Results show that Progresa increases secondary school enrollment among beneficiaries from 71.9% to 79.2%, eliminating the difference between poor and non-poor. On average, poor children's school achievement increases by 0.3 years over the three year secondary cycle. The program benefits more children from the poorest households, with uneducated parents, and living further away from a school. We show that reducing failure rate of children with uneducated parents and increasing access to or information on job opportunities that offer higher return to education outside the community would also greatly increase enrollment into secondary school.
School Choice in a Market Environment: Individual versus Social Expectations
Complexity, 2018
School choice is a key factor connecting personal preferences (beliefs, desires, and needs) and school offer in education markets. While it is assumed that preferences are highly individualistic forms of expectations by means of which parents select schools satisfying their internal moral standards, this paper argues that a better matching between parental preferences and school offer is achieved when individuals take into account their relevant network vicinity, thereby constructing social expectations regarding school choice. We develop two related models (individual expectations and social expectations) and prove that they are driven by a Lyapunov function, obtaining that both models converge to fixed points. Also, we assess their performance by conducting computational simulations. While the individual expectations model shows a probabilistic transition and a critical threshold below which preferences concentrate in a few schools and a significant amount of students is left unattended by the school offer, the social expectations model presents a smooth dynamics in which most of the schools have students all the time and no students are left out. We discuss our results considering key topics of the empirical research on school choice in educational market environments and conclude that social expectations contribute to improve information and lead to a better matching between school offer and parental preferences.
Subjective Beliefs and Schooling Decisions
Social Science Research Network, 2007
This paper considers the estimation of sequential schooling decisions made by agents who are endowed with subjective beliefs about their own ability. I use unique Italian panel data which provide information on i) the curvature of the per-period utility function, ii) schooling decisions, iii) post-schooling earnings, in order to estimate the future component of the differences in intertemporal utilities of school and work independently from the present component, (as in Geweke and Keane, 1995, 2001), and evaluate the importance of "present bias". Under certain conditions, which include imposing equality between the modal belief and true ability, I recover individual specific subjective probability distributions. I estimate both the degree of confidence (a measure of spread) and the incidence of over (and under) estimation. I find that the future component of intertemporal utilities dominates schooling decisions. I find a strong incidence of underestimation among the more able and a much smaller incidence of over-estimation among the low ability group. At the medium ability spectrum, there is evidence of some over-estimation. The degree of confidence is high and imply that agents have a substantial amount of inside information (36% of the population act on a degenerate subjective distribution). Overall, the variance of the objective ability heterogeneity distribution is 4 times as large the variance of the distribution characterizing subjective beliefs. JEL Classification: J24.