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College Attrition and the Dynamics of Information Revelation

dc.contributor.author Arcidiacono, Peter S
dc.contributor.author Aucejo, E
dc.contributor.author Maurel, Arnaud Pierre
dc.contributor.author Ransom, T
dc.date.accessioned 2016-12-06T15:45:05Z
dc.date.issued 2016-05-31
dc.identifier.uri https://hdl.handle.net/10161/13192
dc.description.abstract This paper investigates the role played by informational frictions in college and the workplace. We estimate a dynamic structural model of schooling and work decisions, where individuals have imperfect information about their schooling ability and labor market productivity. We take into account the heterogeneity in schooling investments by distinguishing between two- and four-year colleges, graduate school, as well as science and non-science majors for four-year colleges. Individuals may also choose whether to work full-time, part-time, or not at all. A key feature of our approach is to account for correlated learning through college grades and wages, whereby individuals may leave or re-enter college as a result of the arrival of new information on their ability and productivity. Our findings indicate that the elimination of informational frictions would increase the college graduation rate by 9 percentage points, and would increase the college wage premium by 32.7 percentage points through increased sorting on ability.
dc.format.extent 69 pages
dc.relation.ispartof Economic Research Initiatives at Duke (ERID)
dc.title College Attrition and the Dynamics of Information Revelation
dc.type Journal article
pubs.issue 222
pubs.organisational-group Duke
pubs.organisational-group Duke Population Research Center
pubs.organisational-group Duke Population Research Institute
pubs.organisational-group Economics
pubs.organisational-group Sanford School of Public Policy
pubs.organisational-group Trinity College of Arts & Sciences


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