Title

The Effects of Earnings Disclosure on College Enrollment Decisions

Author(s)

Justine Hastings Justine Hastings (Brown University)

Christopher A. Neilson Christopher Neilson (Princeton University)

Seth D. Zimmerman Seth Zimmerman (University of Chicago)

Abstract

We use a large-scale survey and field experiment to evaluate a policy that provided information about college- and major-specific earnings and cost outcomes to college applicants in Chile. The intervention was administered by the Chilean government and reached 30% of student loan applicants. We show that the low-income and low-achieving students who apply to low-earning college degree programs overestimate earnings for past graduates by over 100%, while beliefs for high-achieving students are correctly centered. Treatment causes low-income students to reduce their demand for low-return degrees by 4.6%, and increases the likelihood they remain in college for at least four years. To understand the mechanisms driving the effect of disclosure policies we estimate a model of college demand. We find that disclosure changes college choice by reducing uncertainty about earnings outcomes, but that its impact is limited by strong student preferences for non-pecuniary degree attributes.

Creation Date

2015-06

Section URL ID

Paper Number

2015-1

URL

https://christopherneilson.github.io/work/documents/w21300.pdf

File Function

Jel

H0, H52, I22, I23, I24, I26, J3

Keyword(s)

College, Enrollment, Earnings Disclosure, Chile

Suppress

false

Series

13