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The Role of Expectations in Adolescent Schooling Choices: Do Youths Respond to Economic Incentives?

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  • Kathryn Wilson
  • Barbara Wolfe
  • Robert Haveman

Abstract

We address the role of youths' own choice-conditioned expectations in understanding their schooling choices by constructing a choice (or "switching") model. We emphasize the effect of individual student perceptions regarding the returns associated with graduating from high school versus dropping out, while controlling for an extensive set of family and community factors. We find that youths' expected income returns to graduating from high school are influential in their schooling choices, even when an extensive set of background, economic, family, and neighborhood variables, designed to capture the effects of parental and governmental decisions, is introduced into the analysis. (JEL I20, J24) Copyright 2005, Oxford University Press.

Suggested Citation

  • Kathryn Wilson & Barbara Wolfe & Robert Haveman, 2005. "The Role of Expectations in Adolescent Schooling Choices: Do Youths Respond to Economic Incentives?," Economic Inquiry, Western Economic Association International, vol. 43(3), pages 467-492, July.
    • Handle: RePEc:oup:ecinqu:v:43:y:2005:i:3:p:467-492
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    Citations

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    Cited by:

    1. Lindvall, Lars, 2009. "Neighbourhoods, economic incentives and post compulsory education choices," Working Paper Series 2009:11, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    2. Nathan Deutscher, 2020. "What Drives Second Generation Success? The Roles Of Education, Culture, And Context," Economic Inquiry, Western Economic Association International, vol. 58(4), pages 1707-1730, October.
    3. Li Dai & Pedro S. Martins, 2020. "Does vocational education pay off in China? Instrumental-variable quantile-regression evidence," Working Papers 100, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
    4. Lauer, Charlotte, 2000. "Enrolments in higher education in West Germany: the impact of social background, labour market returns and educational funding," ZEW Discussion Papers 00-59, ZEW - Leibniz Centre for European Economic Research.
    5. Takashi Oshio & Masaya Yasuoka, 2009. "How Long Should We Stay In Education If Ability Is Screened?," Metroeconomica, Wiley Blackwell, vol. 60(3), pages 409-431, July.
    6. Flannery, Darragh & O’Donoghue, Cathal, 2013. "The demand for higher education: A static structural approach accounting for individual heterogeneity and nesting patterns," Economics of Education Review, Elsevier, vol. 34(C), pages 243-257.
    7. S. Mahuteau & K. Mavromaras, 2014. "An analysis of the impact of socio-economic disadvantage and school quality on the probability of school dropout," Education Economics, Taylor & Francis Journals, vol. 22(4), pages 389-411, August.
    8. Wolter, Stefan C. & Zbinden, André, 2001. "Rates of Return to Education: The View of Students in Switzerland," IZA Discussion Papers 371, Institute of Labor Economics (IZA).
    9. John Cullinan & Darragh Flannery & Sharon Walsh & Selina Mccoy, 2013. "Distance Effects, Social Class and the Decision to Participate in Higher Education in Ireland," The Economic and Social Review, Economic and Social Studies, vol. 44(1), pages 19-51.
    10. Mads Meier Jæger, 2007. "Economic and Social Returns To Educational Choices," Rationality and Society, , vol. 19(4), pages 451-483, November.
    11. Pablo Brañas-Garza; Riccardo Ciacci; Ericka Rascón Ramírez, 2020. "Order Matters: Eliciting Maternal Beliefs on Educational Choices," Economics Working Papers ECO 2020/01, European University Institute.
    12. Dai, Li & Martins, Pedro S., 2024. "Does vocational education pay off in China? Evidence from city-level education supply shocks," Economic Modelling, Elsevier, vol. 140(C).
    13. Hügle, Dominik, 2021. "The decision to enrol in higher education," Discussion Papers 2021/8, Free University Berlin, School of Business & Economics.
    14. Stocké, Volker, 2008. "Educational decisions as rational choice? : an empirical test of the Erikson-Jonsson model for explaining educational attainment," Papers 08-03, Sonderforschungsbreich 504.
    15. Asplund, Rita (ed.), . "Education and Earnings. Further Evidence from Europe," ETLA B, The Research Institute of the Finnish Economy, number 183, June.
    16. Flannery, Darragh & O'Donoghue, Cathal, 2009. "Participation in Higher Education: A Random Parameter Logit Approach with Policy Simulations," IZA Discussion Papers 4163, Institute of Labor Economics (IZA).
    17. Dai, Li & Martins, Pedro S., 2024. "The Wage Effects of Polytechnic Degrees: Evidence from the 1999 China Higher Education Expansion," GLO Discussion Paper Series 1399, Global Labor Organization (GLO).
    18. Sarah Brown & Karl Taylor, 2006. "Education, Risk Preference and Wages," Working Papers 2006002, The University of Sheffield, Department of Economics, revised Feb 2006.
    19. Brañas-Garza, Pablo & Ciacci, Riccardo & Ramírez, Ericka G. Rascón, 2022. "Anchors matter: Eliciting maternal expectations on educational outcomes," Journal of Economic Psychology, Elsevier, vol. 90(C).

    More about this item

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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