Do college students make better predictions of their future income than young adults in the labor force?

John Jerrim

Education Economics, 2015, vol. 23, issue 2, 162-179

Abstract: Several studies have considered whether American college students' hold 'realistic' wage expectations. The consensus is that they do not - overestimation of future earnings is in the region of 40-50%. But is it just college students who overestimate the success they will have in the labor market, or is this something common to all young adults? In this paper, I analyze National Educational Longitudinal Study (1988) data to consider whether 20-year-old college men are more realistic about their future income than their peers (of the same age) who are already in the labor force. My findings suggest that young people in employment actually make worse predictions of their future income (on average) than certain student groups, so long as the latter successfully obtain a university degree.

Date: 2015
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DOI: 10.1080/09645292.2013.769045

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