Human Capital Investments and Expectations About Career and Family

68 Pages Posted: 2 Sep 2016 Last revised: 11 Nov 2017

See all articles by Matthew Wiswall

Matthew Wiswall

University of Wisconsin - Madison - Department of Economics; National Bureau of Economic Research (NBER)

Basit Zafar

Arizona State University

Multiple version iconThere are 2 versions of this paper

Date Written: 2016-08-01

Abstract

This paper studies how individuals believe human capital investments will affect their future career and family life. We conducted a survey of high-ability currently enrolled college students and elicited beliefs about how their choice of college major, and whether to complete their degree at all, would affect a wide array of future events, including future earnings, employment, marriage prospects, potential spousal characteristics, and fertility. We find that students perceive large “returns" to human capital not only in their own future earnings, but also in a number of other dimensions (such as future labor supply and potential spouse’s earnings). In a recent follow-up survey conducted six years after the initial data collection, we find a close connection between the expectations and current realizations. Finally, we show that both the career and family expectations help explain human capital choices.

Keywords: human capital, subjective expectations, college major, uncertainty, marriage, fertility, labor supply, gender

JEL Classification: D81, D84, I21, I23, J10, J12, J13, J16, J24

Suggested Citation

Wiswall, Matthew and Zafar, Basit, Human Capital Investments and Expectations About Career and Family (2016-08-01). FRB of NY Staff Report No. 792, Available at SSRN: https://ssrn.com/abstract=2833771

Matthew Wiswall (Contact Author)

University of Wisconsin - Madison - Department of Economics ( email )

William H. Sewell Social Science Building
1180 Observatory Drive
Madison, WI 53706-1393
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Basit Zafar

Arizona State University ( email )

WP Carey School of Business, ASU
Tempe, AZ 85287
United States
9179326564 (Phone)

HOME PAGE: http://https://sites.google.com/site/basitakzafar/

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