Working Paper: NBER ID: w22543
Authors: Matthew Wiswall; Basit Zafar
Abstract: This paper studies how individuals "believe" human capital investments will affect their future career and family life. We conducted a survey of high-ability currently enrolled college students and elicited beliefs about how their choice of college major, and whether to complete their degree at all, would affect a wide array of future events, including future earnings, employment, marriage prospects, potential spousal characteristics, and fertility. We find that students perceive large "returns" to human capital not only in their own future earnings, but also in a number of other dimensions (such as future labor supply and potential spouse's earnings). In a recent follow-up survey conducted six years after the initial data collection, we find a close connection between the expectations and current realizations. Finally, we show that both the career and family expectations help explain human capital choices.
Keywords: human capital; career expectations; family expectations; college major; marriage prospects; fertility
JEL Codes: D81; D84; I21; I23; J10; J12; J13; J16; J24
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Completing a college degree (I23) | Probability of being married by age 30 (J12) |
| Completing a degree in science or business (M19) | Probability of being married by age 30 for women (J12) |
| Completing a degree in science or business (M19) | Probability of being married by age 30 for men (J12) |
| Completing a higher-earning degree (I23) | Expectations of marrying a higher-earning spouse (J12) |
| Completing a science or business degree (M19) | Expected number of children by age 30 for men (J19) |
| Completing a science or business degree (M19) | Expected number of children by age 30 for women (J13) |
| Completing a science or business degree (M19) | Probability of full-time employment (J29) |
| Expectations about earnings, marriage, and labor supply (J29) | Realized outcomes (I24) |