Education, Decision-Making, and Economic Rationality

46 Pages Posted: 2 Aug 2018

See all articles by James W. Banks

James W. Banks

Institute for Fiscal Studies; University of Manchester

Leandro S. Carvalho

Center for Economic and Social Research (CESR)

Francisco Pérez-Arce

Center for Economic and Social Research (CESR)

Date Written: August 2, 2018

Abstract

This article studies the causal effect of education on decision-making. In 1972 England raised its minimum school-leaving age from 15 to 16 for students born after September 1, 1957. An online survey was conducted with 2,700 individuals born in a 36-month window on either side of this date. Participants made 25 incentivized risk choices that allow us to measure multiple dimensions of decision-making. Despite the policy having effects on education, educational qualifications, and income, we find no effects of the policy on decision-making or decision-making quality.

Keywords: Education, Decision-Making, Rationality

JEL Classification: D12, D14, D81, D91, G11, I20, I21

Suggested Citation

Banks, James W. and Carvalho, Leandro S. and Perez-Arce, Francisco, Education, Decision-Making, and Economic Rationality (August 2, 2018). CESR-Schaeffer Working Paper No. 003. Available at SSRN: https://ssrn.com/abstract=3225321 or http://dx.doi.org/10.2139/ssrn.3225321

James W. Banks (Contact Author)

Institute for Fiscal Studies ( email )

7 Ridgmount Street
London, WC1E 7AE
United Kingdom

University of Manchester

Oxford Road
Manchester, M13 9PL
United Kingdom

Leandro S. Carvalho

Center for Economic and Social Research (CESR) ( email )

635 Downey Way
Los Angeles, CA 90089-3332
United States

Francisco Perez-Arce

Center for Economic and Social Research (CESR) ( email )

635 Downey Way
Los Angeles, CA 90089-3332
United States

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