Stepping Stone and Option Value in a Model of Postsecondary Education

Trachter, Nicholas

doi:10.2139/ssrn.2391875

Cited by 4 publications

(3 citation statements)

References 30 publications

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“…This treatment of learning is consistent with existing literature, but novel in form. The students modeled by Stange (2012), Stinebrickner andStinebrickner (2014), andTrachter (2015) are imperfectly informed about their academic ability and face a trade-off between learning from continued enrollment or entering the labor market. In both those models and mine, agents observe their own abilities imperfectly and use a Bayesian updating rule to form posterior predictions.…”

Section: Learning About Academic Ability and Employabilitymentioning

confidence: 99%

“…Although future states may be probabilistic in each of the aforementioned studies (agents face risk of grade failure or unemployment, for instance), they all assume the agent is perfectly informed about how current endowments map into future states. This article follows a smaller number of sequential schooling choice and job search models (including Jovanovic, 1979(including Jovanovic, , 1984Miller, 1984;Arcidiacono, 2004;Belzil, 2007;James, 2011;Stange, 2012;Trachter, 2015;Arcidiacono et al, 2016) that do not assume perfect information, but instead model how agents learn about choice-relevant parameters as they accumulate new information. As in those models, I posit that agents are imperfectly informed about their academic ability and employment opportunities, formulate a model of how they learn about these characteristics, and estimate the parameters underlying the learning process.…”

Section: Introductionmentioning

confidence: 99%

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Bumpy Rides: School‐to‐work Transitions in South Africa

Pugatch

2017

Labour

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. Re-enrollment in school following a period of dropout is a common feature of the South African school to work transition that has been largely ignored in both the literature on South Africa and the wider literature on sequential schooling choice. In this paper, I quantify the importance of the option to re-enroll in the school to work transition of South African youth. I estimate a structural model of schooling choice in South Africa using a panel dataset that contains the entire schooling and labor market histories of sampled youth. Estimates of the model's structural parameters confirm the hypothesis that enrollment choices reflect dynamic updating of the relative returns to schooling versus labor market participation. In a policy simulation under which re-enrollment prior to high school completion is completely restricted, the proportion completing at least 12 years of schooling rises 6 percentage points, as youth who would have dropped out under unrestricted re-enrollment reconsider the long-term consequences of doing so. The results suggest that the option to re-enroll is an important component of the incentives South African youth face when making schooling decisions.JEL Classification: I21, J24, O12

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Section: Learning About Academic Ability and Employabilitymentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Bumpy Rides: School‐to‐work Transitions in South Africa

Pugatch

2017

Labour

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“…In one strand of this literature, researchers model students as acquiring information (learning) throughout college-regarding, for instance, their ability and preferences for college or specific majors, and their expected labor market performance. This literature includes Arcidiacono (2004), Arcidiacono et al (2016), Ozdagli and Trachter (2011), Stinebrickner and Stinebrickner (2014), and Trachter (2015). As in these papers, students in our model adjust their expected graduation probability based on classes completed and choose effort accordingly.…”

Section: Related Literaturementioning

confidence: 99%

Rising College Access and Completion : How Much can Free College Help ?

Ferreyra¹,

Garriga²,

Martín³

et al. 2020

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The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

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Estimation of Dynamic Discrete Choice Models by Maximum Likelihood and the Simulated Method of Moments

Eisenhauer

Heckman

Mosso

2015

Int Economic Review

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We compare the performance of maximum likelihood (ML) and simulated method of moments (SMM) estimation for dynamic discrete choice models. We construct and estimate a simplified dynamic structural model of education that captures some basic features of educational choices in the United States in the 1980s and early 1990s. We use estimates from our model to simulate a synthetic dataset and assess the ability of ML and SMM to recover the model parameters on this sample. We investigate the performance of alternative tuning parameters for SMM.

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Stepping Stone and Option Value in a Model of Postsecondary Education

Cited by 4 publications

References 30 publications

Bumpy Rides: School‐to‐work Transitions in South Africa

Bumpy Rides: School‐to‐work Transitions in South Africa

Rising College Access and Completion : How Much can Free College Help ?

Estimation of Dynamic Discrete Choice Models by Maximum Likelihood and the Simulated Method of Moments

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