Working Paper: NBER ID: w20609
Authors: Adam M. Lavecchia; Heidi Liu; Philip Oreopoulos
Abstract: Behavioral economics attempts to integrate insights from psychology, neuroscience, and sociology in order to better predict individual outcomes and develop more effective policy. While the field has been successfully applied to many areas, education has, so far, received less attention - a surprising oversight, given the field's key interest in long-run decision-making and the propensity of youth to make poor long-run decisions. In this chapter, we review the emerging literature on the behavioral economics of education. We first develop a general framework for thinking about why youth and their parents might not always take full advantage of education opportunities. We then discuss how these behavioral barriers may be preventing some students from improving their long-run welfare. We evaluate the recent but rapidly growing efforts to develop policies that mitigate these barriers, many of which have been examined in experimental settings. Finally, we discuss future prospects for research in this emerging field.
Keywords: Behavioral Economics; Education; Decision Making; Policy
JEL Codes: D03; D87; I21; J24
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Developmental stages of the brain (D87) | Educational decisions (I21) |
| Younger individuals rely heavily on immediate rewards (D91) | Suboptimal educational choices (I21) |
| Interventions designed to change the way choices are presented (D91) | Impact on behavior (D91) |
| Automatic enrollment in pension plans (H55) | Increased savings (D14) |
| Students' reliance on routines (C92) | Hindered ability to take advantage of educational opportunities (I24) |
| Providing timely information (G14) | Overcome behavioral barriers (D91) |
| Negative identities (J15) | Detract from educational engagement (I21) |
| Addressing negative identities through positive reinforcement (Z13) | Improve educational outcomes (I24) |