Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/149203
Authors: 
Kunz, Johannes S.
Staub, Kevin E.
Year of Publication: 
2016
Series/Report no.: 
IZA Discussion Papers 10344
Abstract: 
The outcome of pursuing an upper or post-secondary education degree is uncertain. A student might not complete a chosen degree for a number of reasons, such as insufficient academic preparation or financial constraints. Thus, when considering whether to invest in post-secondary education, students must factor their probability of completing the degree into their decision. We study the role of this uncertainty in education choices using representative survey data from Germany. Students' subjective beliefs about the probability of completing a post-secondary education were elicited prior to them finishing their secondary education. We relate these subjective completion probabilities to students' subsequent education choices and outcomes. We find that these early beliefs are predictive of intentions to invest in education, actual subsequent investments in education, and degree completion. A structural choice model of sequential investment further reveals that the association between completion beliefs and investment choices is strongest for students with low academic skills and low preferences for post-secondary education.
Subjects: 
subjective beliefs
subjective probabilities
completion uncertainty
post-secondary education
human capital investment
JEL: 
I21
I26
J24
Document Type: 
Working Paper

Files in This Item:
File
Size
570.7 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.