Volume 31, Number 1 (Winter) 1996
Betts, Julian R. 1996. "What Do Students Know About Wages? Evidence from a Survey of Undergraduates.", Journal of Human Resources 31(1):27-56.
The
paper uses a survey to examine undergraduates’ knowledge of salaries by type
of education. Students’ beliefs varied systematically with their year of study
and personal background. The median student made (estimated) absolute errors of
approximately 20 percent, but the mean signed error was only -6 percent.
Regression analysis revealed links between students’ knowledge of the labor
market, and year of study, proximity of the occupation to the student’s own
field and parents’ income. Over half of learning occurred during the fourth
year. Logit analyses of students’ use of information sources supported this
conclusion. Implications for human capital theory are considered.
The author would like to thank Dan Black, George Borjas, Laurel McFarland, Richard Murnane, Herbert Smith and two anonymous referees for helpful comments. and Fred Koerber, Catherine Moore, Nima Patel, Phong Trinh, Vadim Vorobyov, and Jay Wright for excellent research assistance. He is also indebted to UCSD for research support. The data used in this article can be obtained beginning in August 1996 through July 1999 from the author: Department of Economics, University of California, San Diego, La Jolla, California 92093-0508.
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