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

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Author Info

  • 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.

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File URL: http://hdl.handle.net/10.1093/ei/cbi032
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Bibliographic Info

Article provided by Western Economic Association International in its journal Economic Inquiry.

Volume (Year): 43 (2005)
Issue (Month): 3 (July)
Pages: 467-492

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Handle: RePEc:oup:ecinqu:v:43:y:2005:i:3:p:467-492

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Cited by:
  1. Cullinan, John & Flannery, Darragh & Walsh, Sharon & McCoy, Selina, 2012. "Distance Effects, Social Class and the Decision to Participate in Higher Education in Ireland," Papers WP444, Economic and Social Research Institute (ESRI).
  2. 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.
  3. 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 - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  4. Wolter, Stefan C. & Zbinden, André, 2001. "Rates of Return to Education: The View of Students in Switzerland," IZA Discussion Papers 371, Institute for the Study of Labor (IZA).
  5. Sarah Brown & Karl Taylor, 2006. "Education, Risk Preference and Wages," Working Papers 2006002, The University of Sheffield, Department of Economics, revised Feb 2006.
  6. Mahuteau, Stéphane & Mavromaras, Kostas G., 2013. "An Analysis of the Impact of Socioeconomic Disadvantage and School Quality on the Probability of School Dropout," IZA Discussion Papers 7566, Institute for the Study of Labor (IZA).
  7. Flannery, Darragh & O'Donoghue, Cathal, 2009. "Participation in Higher Education: A Random Parameter Logit Approach with Policy Simulations," IZA Discussion Papers 4163, Institute for the Study of Labor (IZA).

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