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Do college students make better predictions of their future income than young adults in the labor force?

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  • John Jerrim

Abstract

Several studies have considered whether American college students' hold 'realistic' wage expectations. The consensus is that they do not - overestimation of future earnings is in the region of 40-50%. But is it just college students who overestimate the success they will have in the labor market, or is this something common to all young adults? In this paper, I analyze National Educational Longitudinal Study (1988) data to consider whether 20-year-old college men are more realistic about their future income than their peers (of the same age) who are already in the labor force. My findings suggest that young people in employment actually make worse predictions of their future income (on average) than certain student groups, so long as the latter successfully obtain a university degree.

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  • John Jerrim, 2015. "Do college students make better predictions of their future income than young adults in the labor force?," Education Economics, Taylor & Francis Journals, vol. 23(2), pages 162-179, April.
    • Handle: RePEc:taf:edecon:v:23:y:2015:i:2:p:162-179
    DOI: 10.1080/09645292.2013.769045
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    References listed on IDEAS

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    1. Arcidiacono, Peter & Hotz, V. Joseph & Kang, Songman, 2012. "Modeling college major choices using elicited measures of expectations and counterfactuals," Journal of Econometrics, Elsevier, vol. 166(1), pages 3-16.
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    Cited by:

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    7. Koksharov, V. A. & Agarkov, G. A., 2015. "Analysis of Economic Motives in the Individual Choice of Educational Paths," R-Economy, Ural Federal University, Graduate School of Economics and Management, vol. 1(1), pages 153-159.
    8. Anna Tikhonova, 2018. "The Estimation of the Importance of Universities Performance Assessment for Stakeholders," Economy of region, Centre for Economic Security, Institute of Economics of Ural Branch of Russian Academy of Sciences, vol. 1(2), pages 536-546.
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