College drop out rate

We estimate a dynamic learning model of college dropout, taking advantage of unique expectations data to greatly reduce our reliance on standard assumptions. Our simulations show that 45% of dropout in the first 2 years of college can be attributed to what students learn about their academic performance, with this type of learning playing a smaller role later in college. Poorly performing students tend to leave because staying is not worthwhile rather than because they are at risk of failing out of school. Poor performance substantially decreases the enjoyability of school and substantially influences beliefs about postcollege earnings.

The main problem of higher education (HE) modernization is the balance between inputs and relevant outputs, specifically the right balance of enrolled and graduated students. The university students’ dropout rates result the waste of taxpayers’ money, a lower proportion of the undergraduates and, consequently, lower employment opportunities in highly qualified positions. The university dropout is an important topic in many countries, as well as in Latvia since it is not only the waste of taxpayers’ money but now it is also one of the criteria for evaluating HE institutions. Unfortunately, the strategic policy of HE institutions may increase the number but not necessarily the quality of the undergraduates

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