College Attrition and the Dynamics of Information Revelation

Peter Arcidiacono (), Esteban Aucejo, Arnaud Maurel and Tyler Ransom
Additional contact information
Peter Arcidiacono: Duke University

No 16585, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We examine how informational frictions impact schooling and work outcomes. To do so, we estimate a dynamic structural model where individuals face uncertainty about their academic ability and productivity, which respectively determine their schooling utility and wages. Our framework accounts for heterogeneity in college types and majors, as well as occupational search frictions and work hours. Individuals learn from grades and wages in a correlated manner, and may change their choices as a result. Removing informational frictions would increase the college graduation rate by 4.4 percentage points, which would increase further by 2 percentage points in the absence of search frictions. Providing students with full information about their abilities would also result in large increases in the college and white-collar wage premia, while reducing the college graduation gap by family income.

Keywords: college dropout; dynamic discrete choice; learning; human capital (search for similar items in EconPapers)
JEL-codes: C35 D83 J24 (search for similar items in EconPapers)
Pages: 143 pages
Date: 2023-11
New Economics Papers: this item is included in nep-dge and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: College Attrition and the Dynamics of Information Revelation (2025)
Working Paper: College Attrition and the Dynamics of Information Revelation (2016)
Working Paper: College Attrition and the Dynamics of Information Revelation (2014)
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