University Choice: The Role of Expected Earnings, Nonpecuniary Outcomes, and Financial Constraints

• 成果类型: Article
• 署名作者: Delavande, Adeline; Zafar, Basit
• 署名单位: University of Technology Sydney; Universidade Nova de Lisboa; Arizona State University; Arizona State University-Tempe; National Bureau of Economic Research
• 刊物名称: JOURNAL OF POLITICAL ECONOMY
• ISSN/ISSBN: 0022-3808
• DOI: 10.1086/701808
• 发表日期: 2019
• 页码: 2343-2393
• 关键词: subjective expectations; credit constraints; college major; borrowing constraints; revealed preferences; education; returns; models; Heterogeneity; distributions

摘要

We investigate the determinants of students' university choice in Pakistan, with a focus on monetary returns, nonpecuniary factors enjoyed at school, and financial constraints. To mitigate the identification problem concerning the separation of preferences, expectations, and market constraints, we use rich data on subjective expectations, with direct measures of financial constraints, to estimate a life-cycle model of school choice jointly with school-specific expectations of dropping out. We find that labor market prospects play a small role. Instead, nonpecuniary outcomes, such as the school's ideology, are the major determinants. Policy simulations suggest that relaxing financial constraints would have large welfare gains.