Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/107345 
Year of Publication: 
2015
Series/Report no.: 
CESifo Working Paper No. 5203
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
This paper is motivated by the fact that nearly half of U.S. college students drop out without earning a bachelor's degree. Its objective is to quantify how much uncertainty college entrants face about their graduation outcomes. To do so, we develop a quantitative model of college choice. The innovation is to model in detail how students progress towards a college degree. The model is calibrated using transcript and financial data. We find that more than half of college entrants can predict whether they will graduate with at least 80% probability. As a result, stylized policies that insure students against the financial risks associated with uncertain graduation have little value for the majority of college entrants.
Subjects: 
education
college dropout risk
JEL: 
E24
J24
I21
Document Type: 
Working Paper
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