Expecting better? How young people form their earnings expectations
This study uses data from Young Lives Peru, a longitudinal study tracking a cohort of children from infancy to adolescence
Abstract
Education choices are made based on the expected returns to schooling. If individuals are badly informed, they may make inefficient choices. We directly elicit young people바카라 사이트™s subjective expectations at the age of 14-15 about earnings under different educational scenarios and find these predict university enrolment by the age of 18-19. Females expect lower earnings than males, likely anticipating the reality of the labour market. Living in a poorer household, weaker numeric skills and lower self-efficacy are also associated with lower expected returns to education. Comparing expectations with the actual earnings from a nationally representative sample of individuals matched by sex, region and place of residence, we find that expectations for earnings upon completing secondary education closely match observed earnings, while there is a tendency to overestimate the returns to completing a university degree. These results hold for both males and females although with considerable variation across regions and population subgroups.
Citation
Favara M., P. Glewwe, C. Porter, A. Sánchez (2021), 바카라 사이트śExpecting better? How young people form their earnings expectations바카라 사이트ť, IZA Discussion Papers 14289.