Perceived Ability and School Choices

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Abstract

We study the role of youth’s subjective expectations about their own ability in shaping school choices in secondary education. A field experiment that provides ninth-graders in urban Mexico with individualized feedback about their academic skills generates exogenous variation in beliefs that is used to isolate their role in driving students’ allocation across high schools. We find that mean beliefs increase the value of attending academically-oriented schools, while students with greater dispersion in their beliefs find this curricular track less attractive. These results are in line with the heterogeneous treatment impacts on school choices, since the feedback spurs differential changes in the location of beliefs and overall large variance reductions that either reinforce or counteract the effect of changes in the first moment. The information intervention induces a steeper gradient of the relationship between academic achievement and the demand for academic schools. This reallocation of skills across tracks improves the match between students and schools, as measured by the rate of high-school graduation on time.