Three Essays on Beliefs and Perceptions in Applied Microeconomics

Abstract

The central theme of this thesis revolves around the examination of the role of beliefs and perceptions in labor and education economics. Understanding these aspects is crucial as they significantly influence various economic decisions. In the first chapter, my colleagues and I demonstrate that parental beliefs regarding the returns on education play a significant role in determining their decisions regarding their children's high school education. Furthermore, we highlight how disparities in beliefs across different socioeconomic groups contribute to variations in educational choices. In the second chapter, we document the strong association between social status and networks and students' perceptions of the school environment, focusing on socioeconomically disadvantaged schools. In the last chapter, I examine the influence of media on adolescents' aspirations and gender heterogeneity in this influence. Specifically, I investigate how media shapes perceptions of male adolescents regarding the role of income in their future utility. <br /> In Chapter 1, we explore the link between parental beliefs about educational returns and the selection of secondary school tracks. Using innovative survey data from the Netherlands, we examine parental perceptions regarding (i) the likelihood of their children enrolling in and completing university, and (ii) the financial gains associated with a university degree. We find that parents with lower socioeconomic status perceive the returns to education as well as the likelihood of their children enrolling in and completing university to be substantially lower. Through the application of a choice model, we demonstrate that the perceived probability of completing a university degree and the expected financial advantages play a crucial role in shaping the preference for the academic track. <br /> In Chapter 2, we investigate how adolescents' social status in their peers' eyes shapes the way they view their social climate in secondary schools. Utilizing novel data on over 10,000 students, we construct comprehensive measures of social status and perceived social climate for each student, including a sense of belonging, perceived behavioral norms, and bullying experience. We show that while central and well-connected students are positive about their social environment, less central and socially isolated students view it as hostile. Our results highlight the importance of improving the relational dynamics of adolescents in disadvantaged schools to create better learning environments for all. <br /> In Chapter 3, I investigate how media images, particularly advertisements, shape audiences' aspirations. Utilizing the natural experiment in East Germany, I demonstrate that exposure to Western TV during the formative years of childhood and adolescence increases the income aspirations of males. Additionally, through an online experiment, I highlight that advertisements not only elevate income aspirations but also diminish the desire to have children among male adolescents. The latter particularly holds when the advertisements portray equal sharing of childcare responsibilities within couples. These findings underscore the pivotal role of media in perpetuating and reinforcing stereotypical gender roles.