IDEAS home Printed from https://ideas.repec.org/p/col/000092/012050.html
   My bibliography  Save this paper

Do Colombian students underestimate higher education returns?

Author

Listed:
  • Luis Fernando Gamboa
  • Paul Andrés Rodríguez

Abstract

We analyze the determinants of subjective returns of higher education in Colombia. The information on expectations has been collected in categories, motivating the use of interval regression and an ordered probit approaches for modeling the relationship between beliefs and measures of ability, conditioning on individual, school and regional covariates. The results suggest that there are considerable differences in the size of the expected returns according to some population groups and a strong dominance of college against technical education. Gender gaps disappear in college education but it is found that girls tend to believe that professional wages are more concentrated into higher income categories than boys. Finally, it seems that Colombian students overestimate the pecuniary returns to education.

Suggested Citation

  • Luis Fernando Gamboa & Paul Andrés Rodríguez, 2014. "Do Colombian students underestimate higher education returns?," Documentos de Trabajo 12050, Universidad del Rosario.
    • Handle: RePEc:col:000092:012050
    as

    Download full text from publisher

    File URL: http://repository.urosario.edu.co/bitstream/handle/10336/11002/12050.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Hansen, Karsten T. & Heckman, James J. & Mullen, K.J.Kathleen J., 2004. "The effect of schooling and ability on achievement test scores," Journal of Econometrics, Elsevier, vol. 121(1-2), pages 39-98.
    2. Jeff Dominitz & Charles F. Manski, 1996. "Eliciting Student Expectations of the Returns to Schooling," Journal of Human Resources, University of Wisconsin Press, vol. 31(1), pages 1-26.
    3. Markus K. Brunnermeier & Jonathan A. Parker, 2005. "Optimal Expectations," American Economic Review, American Economic Association, vol. 95(4), pages 1092-1118, September.
    4. Mark B. Stewart, 1983. "On Least Squares Estimation when the Dependent Variable is Grouped," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 50(4), pages 737-753.
    5. Basit Zafar, 2013. "College Major Choice and the Gender Gap," Journal of Human Resources, University of Wisconsin Press, vol. 48(3), pages 545-595.
    6. Patricio S. Dalton & Sayantan Ghosal & Anandi Mani, 2016. "Poverty and Aspirations Failure," Economic Journal, Royal Economic Society, vol. 126(590), pages 165-188, February.
    7. Ernesto Reuben & Matthew Wiswall & Basit Zafar, 2017. "Preferences and Biases in Educational Choices and Labour Market Expectations: Shrinking the Black Box of Gender," Economic Journal, Royal Economic Society, vol. 127(604), pages 2153-2186, September.
    8. Pedro Carneiro & James J. Heckman & Edward J. Vytlacil, 2011. "Estimating Marginal Returns to Education," American Economic Review, American Economic Association, vol. 101(6), pages 2754-2781, October.
    9. Wilbert van der Klaauw, 2012. "On the Use of Expectations Data in Estimating Structural Dynamic Choice Models," Journal of Labor Economics, University of Chicago Press, vol. 30(3), pages 521-554.
    10. Orazio P. Attanasio, 2009. "Expectations and Perceptions in Developing Countries: Their Measurement and Their Use," American Economic Review, American Economic Association, vol. 99(2), pages 87-92, May.
    11. Philip Oreopoulos & Kjell G. Salvanes, 2009. "How large are returns to schooling? Hint: Money isn't everything," NBER Working Papers 15339, National Bureau of Economic Research, Inc.
    12. Aonghas St–Hilaire, 2002. "The Social Adaptation of Children of Mexican Immigrants: Educational Aspirations Beyond Junior High School," Social Science Quarterly, Southwestern Social Science Association, vol. 83(4), pages 1026-1043, December.
    13. Sequeira, Sandra & Spinnewijn, Johannes & Xu, Guo, 2016. "Rewarding schooling success and perceived returns to education: Evidence from India," Journal of Economic Behavior & Organization, Elsevier, vol. 131(PA), pages 373-392.
    14. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    15. Roland G. Fryer, Jr, 2013. "Information and Student Achievement: Evidence from a Cellular Phone Experiment," NBER Working Papers 19113, National Bureau of Economic Research, Inc.
    16. Heckman, James J. & Lochner, Lance J. & Todd, Petra E., 2006. "Earnings Functions, Rates of Return and Treatment Effects: The Mincer Equation and Beyond," Handbook of the Economics of Education, in: Erik Hanushek & F. Welch (ed.), Handbook of the Economics of Education, edition 1, volume 1, chapter 7, pages 307-458, Elsevier.
    17. Hastings, Justine S. & Neilson, Christopher A. & Ramirez, Anely & Zimmerman, Seth D., 2016. "(Un)informed college and major choice: Evidence from linked survey and administrative data," Economics of Education Review, Elsevier, vol. 51(C), pages 136-151.
    18. Orazio Attanasio & Katja Kaufmann, 2009. "Educational Choices, Subjective Expectations, and Credit Constraints," NBER Working Papers 15087, National Bureau of Economic Research, Inc.
    19. Todd Stinebrickner & Ralph Stinebrickner, 2012. "Learning about Academic Ability and the College Dropout Decision," Journal of Labor Economics, University of Chicago Press, vol. 30(4), pages 707-748.
    20. Basit Zafar, 2011. "How Do College Students Form Expectations?," Journal of Labor Economics, University of Chicago Press, vol. 29(2), pages 301-348.
    21. Delavande, Adeline & Giné, Xavier & McKenzie, David, 2011. "Measuring subjective expectations in developing countries: A critical review and new evidence," Journal of Development Economics, Elsevier, vol. 94(2), pages 151-163, March.
    22. Avitabile, Ciro & de Hoyos, Rafael, 2018. "The heterogeneous effect of information on student performance: Evidence from a randomized control trial in Mexico," Journal of Development Economics, Elsevier, vol. 135(C), pages 318-348.
    23. Loyalka, Prashant & Liu, Chengfang & Song, Yingquan & Yi, Hongmei & Huang, Xiaoting & Wei, Jianguo & Zhang, Linxiu & Shi, Yaojiang & Chu, James & Rozelle, Scott, 2013. "Can information and counseling help students from poor rural areas go to high school? Evidence from China," Journal of Comparative Economics, Elsevier, vol. 41(4), pages 1012-1025.
    24. Ruth Alsop & Mette Bertelsen & Jeremy Holland, 2006. "Empowerment in Practice : From Analysis to Implementation," World Bank Publications - Books, The World Bank Group, number 6980, December.
    25. Robert Jensen, 2010. "The (Perceived) Returns to Education and the Demand for Schooling," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(2), pages 515-548.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Paul Rodríguez-Lesmes & José D. Trujillo & Daniel Valderrama, 2015. "Are Public Libraries Improving Quality of Education? When the Provision of Public Goods is not Enough," Revista Desarrollo y Sociedad, Universidad de los Andes,Facultad de Economía, CEDE, December.
    2. Bonilla-Mejía, Leonardo & Bottan, Nicolas L. & Ham, Andrés, 2019. "Information policies and higher education choices experimental evidence from Colombia," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 83(C).
    3. Ilya Prakhov, 2019. "The Determinants Of Expected Returns On Higher Education In Russia: A Human Capital Theory Perspective," HSE Working papers WP BRP 50/EDU/2019, National Research University Higher School of Economics.
    4. Melguizo, Tatiana & Sanchez, Fabio & Velasco, Tatiana, 2016. "Credit for Low-Income Students and Access to and Academic Performance in Higher Education in Colombia: A Regression Discontinuity Approach," World Development, Elsevier, vol. 80(C), pages 61-77.
    5. Ilya Prakhov, 2017. "Determinants of Expected Return on Higher Education in Moscow," Voprosy obrazovaniya / Educational Studies Moscow, National Research University Higher School of Economics, issue 1, pages 25-57.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:bdr:ensayo:v:36:y:2018:i:86:p:1-19 is not listed on IDEAS
    2. Attanasio, Orazio P. & Kaufmann, Katja M., 2014. "Education choices and returns to schooling: Mothers' and youths' subjective expectations and their role by gender," Journal of Development Economics, Elsevier, vol. 109(C), pages 203-216.
    3. Attanasio, Orazio P. & Kaufmann, Katja M., 2017. "Education choices and returns on the labor and marriage markets: Evidence from data on subjective expectations," Journal of Economic Behavior & Organization, Elsevier, vol. 140(C), pages 35-55.
    4. Huntington-Klein, Nick, 2015. "Subjective and projected returns to education," Journal of Economic Behavior & Organization, Elsevier, vol. 117(C), pages 10-25.
    5. Sequeira, Sandra & Spinnewijn, Johannes & Xu, Guo, 2016. "Rewarding schooling success and perceived returns to education: Evidence from India," Journal of Economic Behavior & Organization, Elsevier, vol. 131(PA), pages 373-392.
    6. Ralph Stinebrickner & Todd Stinebrickner, 2014. "Academic Performance and College Dropout: Using Longitudinal Expectations Data to Estimate a Learning Model," Journal of Labor Economics, University of Chicago Press, vol. 32(3), pages 601-644.
    7. Ralph Stinebrickner & Todd R. Stinebrickner, 2014. "A Major in Science? Initial Beliefs and Final Outcomes for College Major and Dropout," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 81(1), pages 426-472.
    8. Pamela Giustinelli & Charles F. Manski, 2018. "Survey Measures Of Family Decision Processes For Econometric Analysis Of Schooling Decisions," Economic Inquiry, Western Economic Association International, vol. 56(1), pages 81-99, January.
    9. Agarwal, Sandip Kumar, 2017. "Subjective beliefs and decision making under uncertainty in the field," ISU General Staff Papers 201701010800006248, Iowa State University, Department of Economics.
    10. Pamela Giustinelli, 2022. "Expectations in Education: Framework, Elicitation, and Evidence," Working Papers 2022-026, Human Capital and Economic Opportunity Working Group.
    11. Todd Stinebrickner & Ralph Stinebrickner, 2012. "Learning about Academic Ability and the College Dropout Decision," Journal of Labor Economics, University of Chicago Press, vol. 30(4), pages 707-748.
    12. Gong, Yifan & Stinebrickner, Ralph & Stinebrickner, Todd, 2022. "Marriage, children, and labor supply: Beliefs and outcomes," Journal of Econometrics, Elsevier, vol. 231(1), pages 148-164.
    13. Justine Hastings & Christopher A. Neilson & Seth D. Zimmerman, 2015. "The Effects of Earnings Disclosure on College Enrollment Decisions," Working Papers 2015-1, Princeton University. Economics Department..
    14. Boneva, Teodora & Golin, Marta & Rauh, Christopher, 2022. "Can perceived returns explain enrollment gaps in postgraduate education?," Labour Economics, Elsevier, vol. 77(C).
    15. Estrada, Ricardo & Gignoux, Jérémie, 2017. "Benefits to elite schools and the expected returns to education: Evidence from Mexico City," European Economic Review, Elsevier, vol. 95(C), pages 168-194.
    16. Schweri, Juerg & Hartog, Joop, 2017. "Do wage expectations predict college enrollment? Evidence from healthcare," Journal of Economic Behavior & Organization, Elsevier, vol. 141(C), pages 135-150.
    17. Marcelo Gantier & Rafael Novella & Andrea Repetto, 2024. "Subjective expectations and schooling choices in Latin America and the Caribbean," Journal of International Development, John Wiley & Sons, Ltd., vol. 36(3), pages 1593-1621, April.
    18. Kerr, Sari Pekkala & Pekkarinen, Tuomas & Sarvimäki, Matti & Uusitalo, Roope, 2020. "Post-secondary education and information on labor market prospects: A randomized field experiment," Labour Economics, Elsevier, vol. 66(C).
    19. Nikoloz Kudashvili & Gega Todua, 2022. "Information, Perceived Returns and College Major Choices," CERGE-EI Working Papers wp717, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    20. Schweri, Juerg & Hartog, Joop, 2014. "Do wage expectations influence the decision to enroll in nursing college?," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100542, Verein für Socialpolitik / German Economic Association.
    21. Ricardo Estrada & Jérémie Gignoux, 2014. "Benefits to elite schools and the formation of expected returns to education: Evidence from Mexico City," Working Papers halshs-00951763, HAL.

    More about this item

    Keywords

    Subjective expectations; ex-ante returns; Colombia; schooling choices;
    All these keywords.

    JEL classification:

    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:col:000092:012050. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Facultad de Economía (email available below). General contact details of provider: https://edirc.repec.org/data/ferosco.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.