Policies for Aspirations and Opportunities

Policy interventions that foster aspirations, such as those using role models, are increasingly being implemented so that students, women, microentrepreneurs, farmers, and poor individuals can achieve untapped opportunities. Several of these interventions have successfully enhanced educational achievements, labor market participation, and business activities. However, raising the aspirations of individuals when they do not have opportunities to realize them can generate frustration and make them worse off. This paper argues that effective policy interventions need to account for both aspirations and opportunities and presents a framework to consider both elements. The paper highlights how addressing either element in isolation can lead to unfavorable outcomes, such as falling into an aspiration trap (when low aspirations prevent people from seizing available opportunities), experiencing frustration (when aspirations are enhanced without matching opportunities), or remaining in a poverty trap (when both aspirations and opportunities are low). The paper discusses various policy approaches to raising aspirations and opportunities in light of these scenarios and the challenges of aligning the two elements.