Essays on the Economics of Education

Abstract

Education can improve individual well-being and reduce inequality. This dissertation studies educational decisions made by students and their parents, in particular the role that information plays in those decisions.

The first chapter studies the role of information about prices in students’ choices of where apply to college. I present descriptive evidence that college applicants, especially low-income applicants, tend to be more focused on and responsive to sticker prices rather to net prices. I also find that among top-percentile SAT-scorers, low- income students apply to less selective colleges than higher-income students. With these two findings in mind, I build and estimate a structural model of students’ information acquisition and college application choice portfolios. The model estimates suggest a sizable friction associated with information acquisition about net college prices that if eliminated may lead lower-income students to apply to higher sticker, but lower net, price schools.

The second chapter studies the role of information about quality in parents’ choices of which childcare provider to enroll their children at. I find that parents prefer childcare providers which receive five-star ratings from the state relative to lower star ratings. The responsiveness to the star rating is larger for home-based providers than for center-based providers, likely because parents have alternative channels to learn about centers. Responsiveness to quality ratings is also larger for higher-income parents and in neighborhoods with a higher share of white residents.

The third chapter studies how grade repetition influences learning and how parents’ beliefs and educational investments shift following a student being held back a grade. We find that following grade repetition, parents revise downward their expectations, beliefs, and investments. Students are discouraged by the retention, and decrease their beliefs in the value of study effort. Overall, we find negative effects of repetition on learning, with repeating students scoring worse on math, English, and Urdu tests and more likely to drop out than their peers.