Work

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

Year: 2018

Type: article

Abstract: 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.

Source: Journal of Political Economy

DOI: 10.1086/701808

Authors: Adeline Delavande, Basit Zafar

Institutions: University of Technology Sydney, NOVA School of Business and Economics, National Bureau of Economic Research, Arizona State University

Language: English

Topic: School Choice and Performance

Subfield: Education

Field: Social Sciences

Domain: Social Sciences

SDGs: Reduced inequalities, Quality education, Decent work and economic growth

Open Access status: green

Funder: Economic and Social Research Council