In a study published in the Journal of Applied Econometrics, Mikael Lindahl and Ariel Pihl from the Department of Economics at the University of Gothenburg, together with other researchers, examined how upper secondary students view future incomes based on different educational paths.
The study is based on a survey of third-year students at more than 40 municipal upper secondary schools in Stockholm. Students were asked to estimate their future incomes both if they pursued further education and if they did not.
The results show that students, on average, expect about 45 percent higher incomes after university studies. At the same time, expectations differ between groups of students. Higher expected returns are observed among women, students from more socioeconomically advantaged backgrounds, and students with higher mathematics achievement.
The findings also show that educational choices are not solely about which path yields the highest average salary. Students often choose based on which education they themselves believe will provide the highest income for them personally.
Those who plan to continue their studies expect, on average, higher returns than those who do not. At the same time, far from everyone follows through on their plans, and many students who say they want to start university do not do so in the following years.
The study also shows that even students who opt out of university often expect that they would benefit financially from further education. This suggests that factors other than salary influence educational choices, even though these are not directly examined in the study.
Read the publication: Earnings Expectations and Educational Sorting: An Ex-Ante Perspective on Returns to University Education.
