A Model of Educational Investment Decisions
The Review of Economics and Statistics
1987
From a probit model of enrollments, estimates of the expected net present value of post secondary education are developed for a sample of high school graduates, based e xclusively on individual expectations of the relevant costs and benefits at the time of the enrollment decision. The results are very plausible and consistent w ith rate-of-return estimates from studies which rely on ex post income data. Thi s suggests that students have rational expectationsand relatively good informat ion about future employment opportunities and other factors which determine the returns to educational investment. Copyright 1987 by MIT Press.
- DOI
- 10.2307/1937898
- Volume
- 69 (1)
- Pages
- 33
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