Social origins, relative risk aversion and track choice

Abstract

This study develops and tests the hypothesis that information biases concerning the perceived extent of risk of educational options fuel social inequalities in track choice. In particular, it is argued that low-educated families are more concerned than college-educated families with the risks of dropout in the academic track, even when their children perform well at school. Moreover, they overestimate the risks of low occupational outcomes associated with academic diplomas. These information biases enhance their propensity to select vocational tracks, which are perceived as safer options, even when their children have the potential to succeed in the academic path. Survey data from Italy were used to assess these misperceptions and experimental evidence is presented concerning their causal effect on track choices. To correct these misperceptions, we designed a light information intervention, which was nested in a longitudinal survey to assess the impact of this intervention on students’ track choices. Both survey and experimental results corroborated our hypothesis that information biases contribute to social inequalities in track choice.