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College Attrition and the Dynamics of Information Revelation

Listed author(s):
  • Tyler Ransom

    (Duke University)

  • Esteban Aucejo

    (London School of Economics)

  • Arnaud Maurel

    (Duke University)

  • Peter Arcidiacono

    (Duke University)

This paper investigates the determinants of college attrition in a setting where individuals have imperfect information about their schooling ability and labor market productivity. We estimate, a dynamic structural model of schooling and work decisions, where high school graduates choose a bundle of education and work combinations. We take into account the heterogeneity in schooling investments by distinguishing between two-, four-year colleges and graduate school, as well as science and non-science majors for four-year colleges. Individuals may also choose whether to work full-time, part-time, or not at all. A key feature of our approach is to account for correlated learning through college grades and wages, thus implying that individuals may leave or re-enter college as a result of the arrival of new information on their ability and productivity. We use our results to quantify the importance of informational frictions in explaining the observed school-to-work transitions and to examine sorting patterns.

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File URL: https://economicdynamics.org/meetpapers/2014/paper_529.pdf
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Paper provided by Society for Economic Dynamics in its series 2014 Meeting Papers with number 529.

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Date of creation: 2014
Handle: RePEc:red:sed014:529
Contact details of provider: Postal:
Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA

Web page: http://www.EconomicDynamics.org/
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  11. Joseph G. Altonji & Erica Blom & Costas Meghir, 2012. "Heterogeneity in Human Capital Investments: High School Curriculum, College Major, and Careers," Annual Review of Economics, Annual Reviews, vol. 4(1), pages 185-223, July.
  12. Carl Sanders, 2012. "Skill Uncertainty, Skill Accumulation, and Occupational Choice," 2012 Meeting Papers 633, Society for Economic Dynamics.
  13. Jonathan James, 2011. "Ability matching and occupational choice," Working Paper 1125, Federal Reserve Bank of Cleveland.
  14. Magali BEFFY & Denis FOUGERE & Arnaud MAUREL, 2009. "Choosing the Field of Study in Post-Secondary Education : Do Expected Earnings Matter ?," Working Papers 2009-14, Center for Research in Economics and Statistics.
  15. Matthew Wiswall & Basit Zafar, 2016. "Preference for the Workplace, Human Capital, and Gender," NBER Working Papers 22173, National Bureau of Economic Research, Inc.
  16. Matteo Bobba & Verónica Frisancho, 2016. "Learning about Oneself: The Effects of Performance Feedback on School Choice," IDB Publications (Working Papers) 7968, Inter-American Development Bank.
  17. Magali Beffy & Denis Fougère & Arnaud Maurel, 2012. "Choosing the Field of Study in Postsecondary Education: Do Expected Earnings Matter?," The Review of Economics and Statistics, MIT Press, vol. 94(1), pages 334-347, February.
  18. Wiswall, Matthew & Zafar, Basit, 2016. "Preference for the workplace, investment in human capital, and gender," Staff Reports 767, Federal Reserve Bank of New York, revised 01 Mar 2017.
  19. Pugatch, Todd, 2012. "Bumpy Rides: School to Work Transitions in South Africa," IZA Discussion Papers 6305, Institute for the Study of Labor (IZA).
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  22. Peter Arcidiacono & Robert A. Miller, 2011. "Conditional Choice Probability Estimation of Dynamic Discrete Choice Models With Unobserved Heterogeneity," Econometrica, Econometric Society, vol. 79(6), pages 1823-1867, November.
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