University choice: the role of expected earnings, non-pecuniary outcomes, and financial constraints

Publication type

Journal Article

Authors

Publication date

October 15, 2019

Summary:

We investigate the determinants of students’ university choice in Pakistan, with a focus on monetary returns, non-pecuniary 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, non-pecuniary outcomes, such as the school’s ideology, are the major determinants. Policy simulations suggest that relaxing financial constraints would have large welfare gains.

Published in

Journal of Political Economy

Volume and page numbers

Volume: 127 , p.2 -2

DOI

https://doi.org/10.1086/701808

ISSN

223808

Subjects

Link

- http://repository.essex.ac.uk/23645/

#525587

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