Structural Estimation of a Model of Attrition from College with Learning
Abstract: The paper presents a dynamic model which explains the decision to go to college, the decision to work and finally the decision to continue college education or drop out, based on the new information obtained while in college. The model is estimated using data on white males extracted from the National Longitudinal Survey of Youth 1979. The estimates show that higher ability individuals are less likely to drop out of college and that the net cost of education decreases with an increase in parents’ education. The observation in the data that those who will drop out of college works more is explained by the higher disutility from work for the higher ability individuals who are less likely to drop out.
Abstract: The paper presents a dynamic model which explains the decision to go to college, the decision to work and finally the decision to continue college education or drop out, based on the new information obtained while in college. The model is estimated using data on white males extracted from the National Longitudinal Survey of Youth 1979. The estimates show that higher ability individuals are less likely to drop out of college and that the net cost of education decreases with an increase in parents’ education. The observation in the data that those who will drop out of college works more is explained by the higher disutility from work for the higher ability individuals who are less likely to drop out.