Students' Earnings Expectations

There is a new working paper by César Alonso-Borrego and Antonio Romero-Medina (from the Economics Department in Universidad Carlos III de Madrid) on students' earnings expectations. The authors provide evidence on the perceived economic value of higher education to college students in terms of their reported expected and shadow wages. The results show that predictions for expected wages are similar across gender and become closer to actual wages as students approach graduation. The authors suggest that this is consistent with an improvement in the quality of student information used to forecast wages.