Alex Eble and Feng Hu
Abstract:
Information affects beliefs, which in turn determine investment decisions. Because human capital exhibits dynamic complementarity, early sources of information play a crucial role in its formation. We study how information from stereotypes and role models influences children’s beliefs, aspirations, investment, and academic performance. A model of investment under uncertainty predicts that role models should have the greatest effect for children facing stereotypes who are also on the margin of giving up on themselves. We exploit random assignment of students to classes in a nationally representative dataset of Chinese middle schools to test the model’s main predictions and address potential alternative explanations.
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Published in Economics of Education Review 77: 101994
