Trapped, Delayed and Handicapped

Sällström, Susanna and Anna Sjögren

No 3335, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: The dynamics of self-confidence are modelled in an environment where rational individuals optimally choose education and occupations with the aim to acquire productive skills while learning about ability. It is shown how the presence of uninformative options can trap individuals below their potential. Furthermore the trade-off between probability of success and value of skills may induce uncertain individuals to acquire less productive skills on their way to ability intensive occupations. The value of information also induces uncertain individuals to delay labour market entry. The model can also explain differences in perseverance in the face of failure.

Keywords: Self-confidence; Self-selection; Skill accumulation; Bayesian learning (search for similar items in EconPapers)
JEL-codes: D83 J24 (search for similar items in EconPapers)
Date: 2002-04
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Citations: View citations in EconPapers (5)

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Working Paper: Trapped, Delayed and Handicapped (2004)
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