IDEAS home Printed from https://ideas.repec.org/p/har/wpaper/0019.html
   My bibliography  Save this paper

An Economic Model of Locus of Control and the Human Capital Investment Decision

Author

Listed:
  • Thomas DeLeire
  • Margo Coleman

Abstract

This paper presents an economic model of how teenagers’ outlooks–specifically their locus of control–affect human capital investments. Locus of control, or internal-external attitudes, is a psychological measure of a person’s belief regarding the causal relationship between his or her own behavior and outcomes. The model allows locus of control to operate through teenagers’ assessment of the return to human capital investments and has testable implications that distinguish it from a model in which locus of control is a proxy for unobserved ability. The effect of eighth graders’ locus of control on their decisions to complete high school and to attend college is empirically examined using the National Education Longitudinal Study of 1988. The empirical results indicate that locus of control strongly influences the decision to invest in education. The results also show that locus of control operates through teenagers’ expectations of the returns to human capital investments, confirming the implications of the theoretical model.

Suggested Citation

  • Thomas DeLeire & Margo Coleman, 2000. "An Economic Model of Locus of Control and the Human Capital Investment Decision," Working Papers 0019, Harris School of Public Policy Studies, University of Chicago.
    • Handle: RePEc:har:wpaper:0019
    as

    Download full text from publisher

    File URL: http://harrisschool.uchicago.edu/about/publications/working-papers/pdf/wp_00_19.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Charles F. Manski, 1993. "Adolescent Econometricians: How Do Youth Infer the Returns to Schooling?," NBER Chapters, in: Studies of Supply and Demand in Higher Education, pages 43-60, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    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. Wändi Bruine de Bruin & Michael F. Bryan & Simon M. Potter & Giorgio Topa & Wilbert Van der Klaauw, 2008. "Rethinking the measurement of household inflation expectations: preliminary findings," Staff Reports 359, Federal Reserve Bank of New York.
    2. Garcia, Rene & Bonomo, Marco, 2001. "Tests of conditional asset pricing models in the Brazilian stock market," Journal of International Money and Finance, Elsevier, vol. 20(1), pages 71-90, February.
    3. R. Haveman & B. Wolfe & K. Wilson & E. Peterson, "undated". "Do Teens Make Rational Choices? The Case of Teen Nonmarital Childbearing," Institute for Research on Poverty Discussion Papers 1137-97, University of Wisconsin Institute for Research on Poverty.
    4. Basit Zafar, 2011. "How Do College Students Form Expectations?," Journal of Labor Economics, University of Chicago Press, vol. 29(2), pages 301-348.
    5. Giovanni Abbiati & Carlo Barone, 2017. "Is university education worth the investment? The expectations of upper secondary school seniors and the role of family background," Rationality and Society, , vol. 29(2), pages 113-159, May.
    6. Johannes S. Kunz & Kevin E. Staub, 2016. "Subjective Completion Beliefs and the Demand for Post-Secondary Education," SOEPpapers on Multidisciplinary Panel Data Research 878, DIW Berlin, The German Socio-Economic Panel (SOEP).
    7. Wolfe, Barbara & Wilson, Kathryn & Haveman, Robert, 2001. "The role of economic incentives in teenage nonmarital childbearing choices," Journal of Public Economics, Elsevier, vol. 81(3), pages 473-511, September.
    8. Ludwig, Jens, 1999. "Information and inner city educational attainment," Economics of Education Review, Elsevier, vol. 18(1), pages 17-30, February.
    9. Peter, Frauke H. & Zambre, Vaishali, 2017. "Intended college enrollment and educational inequality: Do students lack information?," Economics of Education Review, Elsevier, vol. 60(C), pages 125-141.
    10. Sean Nicholson, 2005. "How Much Do Medical Students Know About Physician Income?," Journal of Human Resources, University of Wisconsin Press, vol. 40(1).
    11. Pamela Giustinelli, 2016. "Group Decision Making With Uncertain Outcomes: Unpacking Child–Parent Choice Of The High School Track," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 57(2), pages 573-602, May.
    12. Matilde Isabela Angarita Serrano, 2021. "Entre becas y aulas: ¿Cómo cerramos la brecha?," Documentos CEDE 18901, Universidad de los Andes, Facultad de Economía, CEDE.
    13. Lawrence Hazelrigg & Melissa Hardy, 2000. "Scaling the Semantics of Satisfaction," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 49(2), pages 147-180, February.
    14. Fossen, Frank M. & Glocker, Daniela, 2017. "Stated and revealed heterogeneous risk preferences in educational choice," European Economic Review, Elsevier, vol. 97(C), pages 1-25.
    15. Gary-Bobo, Robert J. & Trannoy, Alain, 2005. "Efficient Tuition & Fees, Examinations and Subsidies," CEPR Discussion Papers 5011, C.E.P.R. Discussion Papers.
    16. Stefanescu, Razvan & Dumitriu, Ramona & Nistor, Costel, 2011. "Motivations for the Bessarabian youth to study in Romanian universities," MPRA Paper 41621, University Library of Munich, Germany, revised 02 Oct 2011.
    17. Stephen L. Morgan, 1998. "Adolescent Educational Expectations," Rationality and Society, , vol. 10(2), pages 131-162, May.
    18. Mukhopadhyay, Abhiroop & Sahoo, Soham, 2016. "Does access to secondary education affect primary schooling? Evidence from India," Economics of Education Review, Elsevier, vol. 54(C), pages 124-142.
    19. Brunello, Giorgio & Lucifora, Claudio & Winter-Ebmer, Rudolf, 2001. "The Wage Expectations of European College Students," IZA Discussion Papers 299, Institute of Labor Economics (IZA).
    20. Patnaik, Arpita & Venator, Joanna & Wiswall, Matthew & Zafar, Basit, 2022. "The role of heterogeneous risk preferences, discount rates, and earnings expectations in college major choice," Journal of Econometrics, Elsevier, vol. 231(1), pages 98-122.

    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:har:wpaper:0019. 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: Eleanor Cartelli (email available below). General contact details of provider: https://edirc.repec.org/data/spuchus.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.