Economics Seminar Series: Mikael Lindahl, University of Gothenburg

Title: Earnings Expectations and Educational Sorting: An Ex-Ante Perspective on Returns to University Education (joint with Nikolay Angelov, Per Johansson and Ariel Pihl)

2021.01.07 | Charlotte Sparrevohn

Date Tue 13 Apr
Time 12:15 13:15
Location Online

Presenter: Mikael Lindahl, University of Gothenburg

Title: Earnings Expectations and Educational Sorting: An Ex-Ante Perspective on Returns to University Education (joint with Nikolay Angelov, Per Johansson and Ariel Pihl)

Abstract:
We estimate means and distributions of ex-ante treatment effects for university education, relative to high school, as well as to university fields-of choices, using elicited earnings expectations associated with counterfactual educational choice for a sample of students from public high schools in Stockholm. We find average ex-ante returns to university to be 36%, with higher returns for females and those with high SES backgrounds, for those that choose university than for those that choose high school, and for those individuals at the margin of attending university, compared to those with lower propensity to enroll. Our results imply that students sort into educations based on their comparative advantage. Additionally, we find evidence that the positive ex-ante earnings returns for many fields, among those that do not choose these fields, can (partly) be reconciled by individuals expecting to be compensated through higher non-pecuniary returns to those fields, in line with models of educational choice where individuals optimize taking into account expectations about both earnings and non-pecuniary outcomes.  

Organisers: Timo Hener and Michael J. Koch

Economics Seminar Series