Socio-Economic Gaps in University Enrollment: The Role of Perceived Pecuniary and Non-Pecuniary Returns

Wednesday 29 November 2017, 11.00AM to 12.00

Speaker(s): Teodora Boneva (UCL)

Abstract: Students from low socio-economic backgrounds are signi ficantly less likely to go to university compared to students from more advantaged backgrounds with similar levels of skills. While traditional models emphasize the role of credit constraints in explaining the socio-economic gap in university attendance, we investigate to what extent the gap can be explained by differences in beliefs about the pecuniary and non-pecuniary benefits of university education. For this purpose, we elicit students' beliefs about the benefi ts of attending university as well as their intentions to go to university in a sample of 2,540 secondary school students in England. Our analysis proceeds in three steps. First, we document that relative to high socio-economic status students, students with low socio-economic status perceive both the pecuniary and non-pecuniary returns to university to be signi cantly lower. Second, we derive and estimate a choice model which allows us to investigate the relative importance of different factors. For both low and high socio-economic status students, the perceived non-pecuniary benefits can explain a large share of the variation in intentions to go to university. Among the non-pecuniary outcomes, expected job satisfaction, parental approval, and perceptions about social life during the 3-4 years after finishing secondary school are most important. Third, we perform a decomposition analysis and fi nd that 49% of the socio-economic gap can be explained by differences in beliefs across socio-economic groups, and that 37% can be explained by differences in beliefs about the non-pecuniary returns alone.

Location: HERC (2nd floor above Alcuin Porters Lodge)

Admission: All welcome