Arbeitspapier

College Attrition and the Dynamics of Information Revelation

We examine how informational frictions impact schooling and work outcomes. To do so, we estimate a dynamic structural model where individuals face uncertainty about their academic ability and productivity, which respectively determine their schooling utility and wages. Our framework accounts for heterogeneity in college types and majors, as well as occupational search frictions and work hours. Individuals learn from grades and wages in a correlated manner, and may change their choices as a result. Removing informational frictions would increase the college graduation rate by 4.4 percentage points, which would increase further by 2 percentage points in the absence of search frictions. Providing students with full information about their abilities would also result in large increases in the college and white-collar wage premia, while reducing the college graduation gap by family income.

Language
Englisch

Bibliographic citation
Series: IZA Discussion Papers ; No. 16585

Classification
Wirtschaft
Multiple or Simultaneous Equation Models: Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
Human Capital; Skills; Occupational Choice; Labor Productivity
Subject
college dropout
dynamic discrete choice
learning
human capital

Event
Geistige Schöpfung
(who)
Arcidiacono, Peter
Aucejo, Esteban
Maurel, Arnaud
Ransom, Tyler
Event
Veröffentlichung
(who)
Institute of Labor Economics (IZA)
(where)
Bonn
(when)
2023

Handle
Last update
10.03.2025, 11:45 AM CET

Data provider

This object is provided by:
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Object type

  • Arbeitspapier

Associated

  • Arcidiacono, Peter
  • Aucejo, Esteban
  • Maurel, Arnaud
  • Ransom, Tyler
  • Institute of Labor Economics (IZA)

Time of origin

  • 2023

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