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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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    7. Basit Zafar, 2011. "How Do College Students Form Expectations?," Journal of Labor Economics, University of Chicago Press, vol. 29(2), pages 301-348.
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    Cited by:

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    3. Pamela Giustinelli, 2022. "Expectations in Education: Framework, Elicitation, and Evidence," Working Papers 2022-026, Human Capital and Economic Opportunity Working Group.
    4. Gavriil Agarkov & Daniil Sandler & Anastasia Sushchenko Anastasia Dmitrievna, 2018. "Financial and Social Success of University Graduates in the Ural Region," Economy of region, Centre for Economic Security, Institute of Economics of Ural Branch of Russian Academy of Sciences, vol. 1(4), pages 1312-1326.
    5. Daniil Sandler & Anastasia Sushchenko Anastasia Dmitrievna, 2016. "Economic Motivations for Master’s Students’ Choice of Educational, Scientific and Professional Trajectories," Economy of region, Centre for Economic Security, Institute of Economics of Ural Branch of Russian Academy of Sciences, vol. 1(2), pages 547-559.
    6. Sandler, D. G. & Sushchenko, A. D., 2016. "Economic Motivations for Master's Students' Choice of Educational, Scientific and Professional Trajectories," R-Economy, Ural Federal University, Graduate School of Economics and Management, vol. 2(2), pages 236-244.
    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.
    9. Sam Jones & Ricardo Santos & Gimelgo Xirinda, 2020. "Misinformed, mismatched, or misled?: Explaining the gap between expected and realized graduate earnings in Mozambique," WIDER Working Paper Series wp-2020-47, World Institute for Development Economic Research (UNU-WIDER).
    10. Daniela Ionescu & Claudia Iuliana Iacob & Eugen Avram & Iuliana Armaș, 2021. "Emotional distress related to hazards and earthquake risk perception," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 109(3), pages 2077-2094, December.

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