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Does Ignorance of Economic Returns and Costs Explain the Educational Aspiration Gap? Evidence from Representative Survey Experiments

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  • Lergetporer, Philipp

    () (Ifo Institute for Economic Research)

  • Werner, Katharina

    () (Ifo Institute for Economic Research)

  • Woessmann, Ludger

    () (Ifo Institute for Economic Research)

Abstract

The gap in university enrollment by parental education is large and persistent in many countries. In our representative survey, 74 percent of German university graduates, but only 36 percent of those without a university degree favor a university education for their children. The latter are more likely to underestimate returns and overestimate costs of university. Experimental provision of return and cost information significantly increases educational aspirations. However, it does not close the aspiration gap as university graduates respond even more strongly to the information treatment. Persistent effects in a follow-up survey indicate that participants indeed process and remember the information. Differences in economic preference parameters also cannot account for the educational aspiration gap. Our results cast doubt that ignorance of economic returns and costs explains educational inequality in Germany.

Suggested Citation

  • Lergetporer, Philipp & Werner, Katharina & Woessmann, Ludger, 2018. "Does Ignorance of Economic Returns and Costs Explain the Educational Aspiration Gap? Evidence from Representative Survey Experiments," IZA Discussion Papers 11453, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp11453
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    Keywords

    inequality; higher education; university; aspiration; information; returns to education; survey experiment;

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare

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