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Rewarding schooling success and perceived returns to education: evidence from India

Sequeira, Sandra, Spinnewijn, Johannes and Xu, Guo (2016) Rewarding schooling success and perceived returns to education: evidence from India. Journal of Economic Behavior and Organization, 131. pp. 373-392. ISSN 0167-2681

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Identification Number: 10.1016/j.jebo.2016.08.015

Abstract

This paper tests two specific mechanisms through which individuals can form expectations about returns to investments in education: recognition for schooling performance, and exposure to successful students through family or social networks. Using a regression discontinuity design, we study the impact of two fellowship programs recognizing educational performance in secondary schools in India. We find that the fellowship award is associated with a significant increase in the perceived value of education, by both increasing the perceived mean of earnings (0.74 standard deviations (SD)) and decreasing the perceived variance in earnings (1.03 SD) associated with additional years of schooling. The effects spill over only selectively to social and family networks. Peers exposed to successful students do not update their beliefs but parents of fellows report higher perceived returns to education. Peers of fellows are however more informed about fellowship opportunities and report a higher intention to apply for the fellowship, thus contributing to the persistence of the potential impact of the fellowship across different cohorts.

Item Type: Article
Official URL: http://www.journals.elsevier.com/journal-of-econom...
Additional Information: © 2016 Elsevier
Divisions: International Development
Economics
Subjects: H Social Sciences > HD Industries. Land use. Labor
L Education > L Education (General)
JEL classification: D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D84 - Expectations; Speculations
J - Labor and Demographic Economics > J2 - Time Allocation, Work Behavior, and Employment Determination and Creation; Human Capital; Retirement > J24 - Human Capital; Skills; Occupational Choice; Labor Productivity
Sets: Departments > International Development
Departments > Economics
Date Deposited: 14 Nov 2016 11:12
Last Modified: 20 Jun 2019 02:24
URI: http://eprints.lse.ac.uk/id/eprint/68279

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