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Updating Human Capital Decisions: Evidence from SAT Score Shocks and College Applications

Author

Listed:
  • Timothy N. Bond
  • George Bulman
  • Xiaoxiao Li
  • Jonathan Smith

Abstract

We estimate whether students update the colleges to which they consider applying in response to large, unanticipated information shocks generated by the release of SAT scores--a primary factor in admission decisions. Exploiting population data on the timing of college selection and a policy that induces students to choose colleges prior to taking the exam, we find that students update their portfolios in terms of selectivity, tuition, and sector. However, the magnitude of updating is too modest to significantly reduce unexplained variation across students, suggesting that nonacademic factors are the dominant determinants of college match.

Suggested Citation

  • Timothy N. Bond & George Bulman & Xiaoxiao Li & Jonathan Smith, 2018. "Updating Human Capital Decisions: Evidence from SAT Score Shocks and College Applications," Journal of Labor Economics, University of Chicago Press, vol. 36(3), pages 807-839.
    • Handle: RePEc:ucp:jlabec:doi:10.1086/696268
    DOI: 10.1086/696268
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    Cited by:

    1. Estevan, Fernanda & Gall, Thomas & Morin, Louis-Philippe, 2025. "On the road to social mobility? Affirmative action and major choice," Labour Economics, Elsevier, vol. 97(C).
    2. Jonathan Smith, 2018. "The Sequential College Application Process," Education Finance and Policy, MIT Press, vol. 13(4), pages 545-575, Fall.
    3. Li, Hongyan & Xia, Xing, 2024. "Grades as signals of comparative advantage: How letter grades affect major choices," Journal of Economic Behavior & Organization, Elsevier, vol. 227(C).
    4. Ribas, Rafael P. & Sampaio, Breno & Trevisan, Giuseppe, 2020. "Short- and long-term effects of class assignment: Evidence from a flagship university in Brazil," Labour Economics, Elsevier, vol. 64(C).
    5. Joshua Goodman & Oded Gurantz & Jonathan Smith, 2020. "Take Two! SAT Retaking and College Enrollment Gaps," American Economic Journal: Economic Policy, American Economic Association, vol. 12(2), pages 115-158, May.
    6. Kunz, Johannes S. & Staub, Kevin E., 2020. "Early subjective completion beliefs and the demand for post-secondary education," Journal of Economic Behavior & Organization, Elsevier, vol. 177(C), pages 34-55.
    7. Michael D. Bloem & Weixiang Pan & Jonathan Smith, 2021. "College entrance exam‐taking strategies in Georgia," Southern Economic Journal, John Wiley & Sons, vol. 88(2), pages 587-627, October.
    8. Cobb-Clark, Deborah A. & Ho, Tiffany & Salamanca, Nicolás, 2021. "Parental Responses to Children's Achievement Test Results," IZA Discussion Papers 14663, IZA Network @ LISER.
    9. Christopher D. Blake & Danna Kang Thomas & Joshua Hess, 2024. "Higher education: The impact of recreational marijuana on college applications," Contemporary Economic Policy, Western Economic Association International, vol. 42(2), pages 259-277, April.
    10. Larissa Fuchs & Pia Pinger & Philipp Seegers, 2025. "Relative Grades and Gender Differences in STEM Enrollment," CRC TR 224 Discussion Paper Series crctr224_2025_633, University of Bonn and University of Mannheim, Germany.
    11. 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).
    12. Posso, Christian & Saravia, Estefanía & Uribe, Pablo, 2023. "Acing the test: Educational effects of the SaberEs test preparation program in Colombia," Economics of Education Review, Elsevier, vol. 97(C).
    13. Arcidiacono, Peter & Kinsler, Josh & Ransom, Tyler, 2022. "Recruit to reject? Harvard and African American applicants," Economics of Education Review, Elsevier, vol. 88(C).

    More about this item

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • I20 - Health, Education, and Welfare - - Education - - - General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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