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NATIONAL BUREAU OF ECONOMIC RESEARCH

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NBER Working Papers and Publications

June 2016College Attrition and the Dynamics of Information Revelation
with Peter Arcidiacono, Esteban Aucejo, Arnaud Maurel: w22325
This paper investigates the role played by informational frictions in college and the workplace. We estimate a dynamic structural model of schooling and work decisions, where individuals have imperfect information about their schooling ability and labor market productivity. We take into account the heterogeneity in schooling investments by distinguishing between two- and four-year colleges, graduate school, as well as science and non-science majors for four-year colleges. Individuals may also choose whether to work full-time, part-time, or not at all. A key feature of our approach is to account for correlated learning through college grades and wages, whereby individuals may leave or re-enter college as a result of the arrival of new information on their ability and productivity. Our findi...
 
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