Stefan C. Wolter

1. Students who are born shortly after a school-entry cut-off date can be almost one year older than classmates born shortly before the same cut-off. Although these students receive the same amount...

A university study is a risky investment because of the non-negligible risk of dropping out without graduating. However, the costs of this risk are controversial, as it is often argued that even an uncertified year of study has a value in the labor market. Using a discrete choice experiment with a representative sample of over 2,500 HR recruiters, we causally estimate the value of incomplete university study relative to realistic alternatives. We find that dropping out of university with a major closely related to an advertised job leads to labor market outcomes similar to those of someone who had not studied at all. Without a direct link to a job, however, dropping out of university significantly reduces lifetime earnings. Furthermore, HR recruiters clearly prefer applicants who have spent the years without studying for human capital accumulation in an alternative way, for example, in the form of a traineeship. Our findings highlight high opportunity costs of incomplete university degrees unless the acquired skills are directly transferable in the labor market.

Despite numerous measures intended to enhance gender equality, gender-specific study and career choices remain a persistent concern for policymakers and academics globally. We contribute to the literature on gendered career choices by focusing on explicitly stated parental preferences for their children’s occupations, using a large-scale randomized survey experiment with 5940 adults in Switzerland. Adolescents consistently name their parents as the most influential factor in career decisions, motivating the focus on parents (and hypothetical parents). In the experiment, respondents are presented with a realistic choice scenario in which they must advise on two proposed apprenticeships for their hypothetical daughter or son. The experiment randomly selects the occupations from 105 pairs, without disclosing their gender distribution. Results show that adults are gender neutral when advising a daughter but have a pronounced preference for male-dominated occupations when advising sons. The latter are found across all ages of adults and for parents and non-parents.

Previous literature on predicting university dropouts is mainly limited to institutional dropouts. Our paper extends this narrow framework by relying on administrative data on study trajectories, covering the entire Swiss higher education system. Using machine learning techniques, we predict university dropouts at the national level, show how these prediction results differ from those using a single university perspective, and provide prediction models for transfers to other higher education institutions. The results show that using only pre-enrollment data, we can correctly classify about 73% of all students, with an AUC of 79. By adding academic performance variables from consecutive semesters, we can correctly label about 88% of students after the 4th semester, with an AUC of 89. However, adding information on transfers to other Swiss universities instead of using information on single institutions only hardly improves the predictive performance of the models. It is, therefore, not surprising that in contrast to predicting university dropouts, the models perform poorly in predicting transfers to other higher education institutions.

A university degree is a risky investment because of the non-negligible risk of having to drop out of university without graduating. However, the costs of this risk are controversial, as it is often argued that even an uncertified year of study has a value in the labor market. To determine this value causally, however, alternatives to studying must also be considered, which is done here with the help of a discrete choice experiment with a representative sample of over 2,500 HR recruiters. The result is that dropping out of university with a major closely related to an advertised job leads to similar labor market outcomes as if someone had not studied at all. Without a direct link to a job, however, dropping out of university significantly reduces lifetime earnings. Furthermore, HR recruiters clearly prefer applicants who have used the years without studying for human capital accumulation in an alternative way, for example in the form of a traineeship.