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Subjective and projected returns to education

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  • Huntington-Klein, Nick

Abstract

There is significant heterogeneity over high school students in the wage and employment rate returns to education. I evaluate this heterogeneity using subjective returns derived from a data set of high school juniors and seniors in Washington State. Variation over observables in projected returns estimated using observed data is uncorrelated with variation in subjective returns elicited by directly asking students about their beliefs. These results mean that returns estimated using observed data are likely a very weak proxy for student beliefs.

Suggested Citation

  • Huntington-Klein, Nick, 2015. "Subjective and projected returns to education," Journal of Economic Behavior & Organization, Elsevier, vol. 117(C), pages 10-25.
    • Handle: RePEc:eee:jeborg:v:117:y:2015:i:c:p:10-25
    DOI: 10.1016/j.jebo.2015.05.005
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    References listed on IDEAS

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    Cited by:

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    2. Baker, Rachel & Bettinger, Eric & Jacob, Brian & Marinescu, Ioana, 2018. "The Effect of Labor Market Information on Community College Students’ Major Choice," Economics of Education Review, Elsevier, vol. 65(C), pages 18-30.
    3. Johannes S. Kunz & Kevin E. Staub, 2016. "Subjective completion beliefs and the demand for post-secondary education," Economics of Education Working Paper Series 0120, University of Zurich, Department of Business Administration (IBW).
    4. Pamela Giustinelli, 2022. "Expectations in Education: Framework, Elicitation, and Evidence," Working Papers 2022-026, Human Capital and Economic Opportunity Working Group.
    5. Chadi, Adrian & de Pinto, Marco & Schultze, Gabriel, 2019. "Young, gifted and lazy? The role of ability and labor market prospects in student effort decisions," Economics of Education Review, Elsevier, vol. 72(C), pages 66-79.
    6. Pooja Balasubramanian, 2020. "Subjective returns to education: Rational expectations of disadvantaged groups in India," WIDER Working Paper Series wp-2020-107, World Institute for Development Economic Research (UNU-WIDER).
    7. Kunz, Johannes S. & Staub, Kevin E., 2020. "Early subjective completion beliefs and the demand for post-secondary education," Journal of Economic Behavior & Organization, Elsevier, vol. 177(C), pages 34-55.
    8. Mu, Ren & Liu, Xinsheng, 2024. "Perceived returns to college education by ethnicity: Evidence from China," Economics Letters, Elsevier, vol. 236(C).
    9. 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.
    10. Diaz-Serrano, Luis & Nilsson, William, 2022. "The reliability of students’ earnings expectations," Labour Economics, Elsevier, vol. 76(C).
    11. Sam Jones & Ricardo Santos & Gimelgo Xirinda, 2020. "Misinformed, mismatched, or misled?: Explaining the gap between expected and realized graduate earnings in Mozambique," WIDER Working Paper Series wp-2020-47, World Institute for Development Economic Research (UNU-WIDER).
    12. Huntington-Klein, Nick, 2016. "“(Un)informed College and Major Choice”: Verification in an alternate setting," Economics of Education Review, Elsevier, vol. 53(C), pages 159-163.
    13. Waibel, Stine & Rüger, Heiko & Ette, Andreas, 2020. "Who benefits? Heterogeneous effects of international student mobility on occupational attainment," WiSo-HH Working Paper Series 61, University of Hamburg, Faculty of Business, Economics and Social Sciences, WISO Research Laboratory.

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    More about this item

    Keywords

    Education; Expectations; Returns; Subjective;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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