The effects of high school curriculum. A model of program and effort choice

Résumé

This paper addresses the impact of study programs in secondary education on long run educational and labor market outcomes. I estimate a dynamic model of educational decisions that allows for observed and unobserved diffrences in initial ability. It is novel in that it adds unobserved effort as a choice variable, along with the choice of study program. This replaces traditional approaches, which assume end-of-year performance follows an exogenous law of motion. I use the model to calculate how each study program contributes to different outcomes and I investigate policies that aim to match students to the right program. I find that academically rigorous programs are important to improve higher education outcomes, while vocational programs prevent drop out, grade retention and unemployment. At the same time, policies that encourage underperforming students to switch to less academic programs do not have a negative impact on higher education outcomes and they substantially reduce grade retention and drop out. I also find that ignoring the fact that students choose their effort level generates biases in counterfactual predictions.