LAUSR

Objective: Though many studies have found that teenagers over-estimate their chances of college completion, the sources of this bias are still not well understood. Methods: This paper compares individuals’ college expectations as teenagers with their subsequent college outcomes using data from the 1997 National Longitudinal Survey of Youth (NLSY97). I analyze how a rich set of youth characteristics correlate with the discrepancy between expectations and realizations. Results: Teenagers’ expectations are highly predictive of future college completion, but they are also systematically positively biased (overly optimistic). I find that scholastic aptitude–as proxied by youths’ AFQT scores–is highly negatively correlated with expectation bias. Once test scores are accounted for, family income, parental education, race/ethnicity, and sex have little or no effect on bias in teenagers’ college expectations. Conclusions: The relationship between scholastic aptitude and college success may not be well understood by some youths, contributing to inflated expectations among those with lower test scores. JEL Codes: D84, I24