Study-Work Trade-off in Contests With Capacity-Constrained Students

Anastasiia Altunina ()
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Anastasiia Altunina: National Research University Higher School of Economics

HSE Working papers from National Research University Higher School of Economics

Abstract: The choice of education and career trajectory plays a crucial role in student behavior and labor market outcomes. This paper investigates how students allocate limited time across academic activities and gaining work experience. We show that in a setting in which student types (or abilities) constitute private information, there are pooling and separating equilibria, which are sustained under a certain state of the job market. Our theoretical model shows how each student’s choice between working and studying depends on the contract, and students’ abilities and expectations about the benefits of a master’s degree. To test the main predictions of the model, we conduct a survey of 122 HSE University economics students, who were completing their bachelor’s degree in 2022. Our empirical findings partially confirm what the theory predicts. We also provide possible explanations for the effects that are not in line with our model but observed among the students.

Keywords: contest theory; signaling; contract theory; education trajectories (search for similar items in EconPapers)
JEL-codes: D82 D86 I26 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2022
New Economics Papers: this item is included in nep-gth
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Published in WP BRP Series: Economics / EC, December 2022, pages 1-41

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Persistent link: https://EconPapers.repec.org/RePEc:hig:wpaper:259/ec/2022

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