This paper examines how skills are shaped by social interactions in families. We show that older siblings causally affect younger sibling's education choices and early career earnings. We focus on critical course choices in high school and overcome the identification challenges of estimating...

This paper explores students' expectations about the returns to completing higher education and provides first evidence on \textit{perceived} signaling and human capital effects. We elicit counterfactual labor market expectations for the hypothetical scenarios of leaving university with or...

This paper explores students' expectations about the returns to completing higher education and provides first evidence on perceived signaling and human capital effects. We elicit counterfactual labor market expectations for the hypothetical scenarios of leaving university with or without a...

This paper explores students' expectations about the returns to completing higher education and provides first evidence on perceived signaling and human capital effects. We elicit counterfactual labor market expectations for the hypothetical scenarios of leaving university with or without a...

Frequently, a log-linear relationship between earnings and years of education is assumed based on the classical human capital earnings equation suggesting constant returns to schooling. This paper reconsiders this functional relationship employing an extended stylized human capital earnings...

The great majority of studies on the effect of school quality on academic outcomes do not take account of changes in student choices concerning effort if school quality, e.g. class size, changes. We show that empirical estimates of the "total" effect of changes in school quality could be quite...

This paper analyzes optimal grading in a world that focuses on top grades. Students choose an effort level, their performance is graded, and their grade correlates with their future income. Ex-ante, the policy maker chooses the optimal coarseness of the grading scale to maximize student welfare....

In this paper we develop a model in which students choose their university coursework based on both investment and consumption incentives. We show that these education decisions are socially inefficient. This result is driven by the fact that students do not consider an externality in the...

Assuming a two-period model with endogenous choices of labour, education, and saving, it is shown to be second-best efficient to deviate from Ramsey’s Rule and to distort qualified labour less than nonqualified labour. Furthermore, if the earnings function displays constant elasticity, the...

Enrollment rates to higher education reveal quite large variation over time which cannot be explained by productivity shocks alone. We develop a human capital investment model in an overlapping generations framework that features endogenous fluctuations in the demand for education. Agents are...