Young, gifted and lazy? The role of ability and labor market prospects in student effort decisions
Adrian Chadi, University of Konstanz, Germany ; Marco de Pinto, Gabriel Schultze, Institute for Labour Law and Industrial Relations in the European Union (IAAEU), Trier University, Germany
Economics of Education Review Volume 72, Number 1, ISSN 0272-7757 Publisher: Elsevier Ltd
This paper examines the decision-making process of students from an economic perspective to understand the determinants of an individual’s willingness to provide effort. Our theoretical model predicts that ability and job market prospects are positive determinants. Analyzing a novel dataset on thousands of German students, however, we instead find that ability has a significantly negative effect on effort. It seems that the marginal gain of increasing effort in terms of higher expected income after studying is lower for high-ability students compared to low-ability students. In regard to the second determinant, the evidence rejects a similar argument, according to which great job market prospects may impair student effort. Applying an instrumental variable approach based on official unemployment data on regional labor markets, we can confirm our prediction on the positive role of perceived employment prospects in actual student behavior.
Chadi, A., de Pinto, M. & Schultze, G. (2019). Young, gifted and lazy? The role of ability and labor market prospects in student effort decisions. Economics of Education Review, 72(1), 66-79. Elsevier Ltd.