Students' choices in education can only be based on expected outcomes. Econometric models that infer expectations based on ex post outcomes impose a rational structure of expectations on school performance and post-graduation earnings. Direct surveys suggest much ignorance and fuzziness. We use...

We analyse a unique data set that combines reservation wage and actually paid wage for a large sample of Dutch recent higher education graduates. On average, accepted wages are almost 8% higher than reservation wages, but there is no fixed proportionality. We find that the difference between...