"When Anything Can Happen”: Anticipated Adversity and Postsecondary Decision-Making

Abstract

We examine how disadvantaged students make postsecondary education decisions, focusing on why they often opt for short, flexible programs that tend to have low returns in the labor market. Prior literature emphasizes information deficits and financial constraints. We draw upon qualitative data collected via open-ended interviews conducted with a sample of economically disadvantaged Black youth in Baltimore. We use these data to develop and explore a complementary narrative: students who have faced instability or hardship in the form of disruptive events, or “adverse shocks” (e.g., violence, eviction or incarceration of a family member), anticipate future shocks that could derail their educational plans. In response, they opt for shorter, more flexible educational programs that they expect they can complete despite anticipated shocks. When possible, we corroborate this narrative using publicly available, large-N data sets such as the National Longitudinal Survey of Youth (NLSY). Finally, we formalize this narrative as a simple dynamic structural model calibrated using data on education choices and returns. The model clarifies that it is impossible to identify costs of schooling without data on beliefs about the probability of non-completion, thus providing guidance on future data collection priorities. More broadly, our approach demonstrates a novel application of mixed methods research: using qualitative data to aid in the specification of a structural model. This approach could be applied in other contexts where behavior is poorly understood and extant data do not contain all of the information needed to generate and test plausible hypotheses.