Journal of Political Economy Vol. 133 No. 1 2025

College Attrition and the Dynamics of Information Revelation

Peter Arcidiacono^1,2,3,4,5,6; Esteban Aucejo^1,2,3,4,5,6; Arnaud Maurel^1,2,3,4,5,6; Tyler Ransom^1,2,3,4,5,6

¹ United States Department of Labor · ² National Bureau of Economic Research · ³ Economic Policy Institute · ⁴ Duke University · ⁵ Arizona State University · ⁶ University of Oklahoma

Abstract

We examine how informational frictions impact schooling and work outcomes by estimating a dynamic structural model where individuals face uncertainty about their academic ability and productivity, which determine their schooling utility and wages. We account for different college types, majors, occupational search frictions, and work hours. Individuals learn from grades and wages, which may affect their choices. Removing informational frictions would increase graduation by 4.4 percentage points and by an additional 2 points without search frictions. Providing students with full information about their abilities would increase the college and white-collar wage premia while reducing the graduation gap by family income.

DOI

10.1086/732526

Volume

133

Issue

1

Pages

53-110

Language

en

Sources

bibtex:phds-export.bib openalex crossref

Cite

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