(Un)Informed College and Major Choice: Evidence from Linked Survey and Administrative Data

36 Pages Posted: 13 Jul 2015 Last revised: 13 Oct 2024

See all articles by Justine S. Hastings

Justine S. Hastings

Brown University; National Bureau of Economic Research (NBER)

Christopher Neilson

New York University (NYU) - Leonard N. Stern School of Business; Princeton University - Princeton School of Public and International Affairs

Anely Ramirez

National Education Council

Seth D. Zimmerman

Yale University; University of Chicago - Booth School of Business

Date Written: July 2015

Abstract

We use large-scale surveys of Chilean college applicants and college students to explore the way students form beliefs about earnings and cost outcomes at different institutions and majors and how these beliefs relate to degree choice and persistence. Linking our survey records to administrative education and earnings data, we compare earnings and cost expectations to observed values for past students and follow survey participants forward to see how beliefs relate to matriculation and dropout outcomes. We find that students have correctly centered but noisy cost expectations, and appear to systematically overestimate earnings outcomes for past graduates. Students who overestimate costs are less likely to matriculate in any degree program and in their stated first-choice program, and are more likely to drop out. Students who overestimate earnings matriculate at similar rates to other students, but choose degree programs where past students have been less likely to graduate, have earned less early in their careers, and have been more likely to default on student loans. Consistent with an informal model of enrollment choice, students with a stated preference for labor market-related degree characteristics are less likely to overestimate earnings outcomes and choose degrees where past students have gone on to earn more, while the opposite is true for students with a stated preference for enjoyment of the curriculum.

Suggested Citation

Hastings, Justine and Neilson, Christopher and Ramirez, Anely and Zimmerman, Seth D., (Un)Informed College and Major Choice: Evidence from Linked Survey and Administrative Data (July 2015). NBER Working Paper No. w21330, Available at SSRN: https://ssrn.com/abstract=2629936

Justine Hastings (Contact Author)

Brown University ( email )

Box 1860
Providence, RI 02912
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
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Christopher Neilson

New York University (NYU) - Leonard N. Stern School of Business ( email )

44 West 4th Street
Suite 9-160
New York, NY NY 10012
United States

Princeton University - Princeton School of Public and International Affairs ( email )

Princeton University
Princeton, NJ 08544-1021
United States

Anely Ramirez

National Education Council ( email )

Marchant Pereira 844
Santiago, Providencia
Chile

Seth D. Zimmerman

Yale University ( email )

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

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