University choice: The role of expected earnings, nonpecuniary outcomes, and financial constraints
- Publication Type:
- Journal Article
- Journal of Political Economy, 2019, 127 (5), pp. 2343 - 2393
- Issue Date:
Copyright Clearance Process
- Recently Added
- In Progress
- Open Access
This item is currently unavailable due to the publisher's embargo.
The embargo period expires on 1 Oct 2020
© 2019 by The University of Chicago. All rights reserved. We investigate the determinants of students’ university choice in Pakistan, with a focus on �monetary returns, nonpecuniary factors enjoyed at school, and financial constraints. To mitigate the identification problem concerning the separation of preferences, expectations, and market constraints, we use rich data on subjective expectations, with direct measures of financial constraints, to estimate a life-cycle model of school choice jointly with school-specific expectations of dropping out. We find that labor market prospects play a small role. Instead, nonpecuniary outcomes, such as the school’s ideology, are the major determinants. Policy simulations suggest that relaxing financial constraints would have large welfare gains.
Please use this identifier to cite or link to this item: