Exposing students to information about the job opportunities and wages in their preferred occupations makes them choose for fields of study with better labor market prospects
As students near the end of secondary school, they face a major decision: should they continue studying, and if so, in what field? This choice can shape their future for years to come. Yet many students make this decision with limited and often incorrect information about the job opportunities and wages associated with different career paths. As a result, they sometimes choose fields with poor job prospects, even when there are better alternatives that also match their interests.
In a recent field experiment, we explored whether providing students with accurate information about job opportunities and wages could improve their choices. We focused on students in pre-vocational secondary education in the Netherlands and worked in partnership with a national career orientation platform. Our study included more than 28,000 students across 243 schools.
On the platform, students complete a test that suggests 20 occupations aligned with their interests. They then pick their top five. First, we asked students to rank these five occupations in order of preference. Next, we asked them to estimate the job prospects and hourly wages for each one. Finally, we randomly selected a group of students and gave them the actual data, some received only information on job prospects, while others received both job prospects and wage data.
What did we find? Students significantly overestimated how good the labor market is for their favorite occupations. Their preferences were often based on optimistic, but incorrect, beliefs. Students who saw the real data more often changed their top-choice occupation and usually opted for one with better job prospects or higher wages
To understand whether this change affected real-world outcomes, we tracked students’ enrollment choices using administrative data from the Dutch Executive Education Agency over a four-year period. Students who received information were more likely to enroll in, and stay in, vocational programs linked to better employment outcomes. On average, their future hourly wages increased by about €0.22, or just over 1%. That may sound small, but given the low cost of the intervention, only €2.13 per student, the benefits outweigh the costs after just one week of full-time work.
From a policy standpoint, these findings highlight how important it is to give students access to accurate labor market information. Without it, they risk making poorly informed decisions that can limit their opportunities. Our intervention is simple, low-cost, and easy to scale, making it a promising tool to support students from all backgrounds in making better education and career choices.
© Bart K. de Koning, Didier Fouarge, and Robert Dur
Bart K. de Koning is postdoctoral Research Associate at Cornell University, USA
Didier Fouarge is director of the Research Centre for Education and the Labour Market (ROA) at Maastricht University, Netherlands, and IZA Research Fellow
Robert Dur is Professor of Economics in the Department of Economics at Erasmus University Rotterdam, Netherlands, and IZA Research Fellow
Please note:
We recognize that IZA World of Labor articles may prompt discussion and possibly controversy. Opinion pieces, such as the one above, capture ideas and debates concisely, and anchor them with real-world examples. Opinions stated here do not necessarily reflect those of the IZA.
Related IZA World of Labor content:
https://wol.iza.org/articles/how-important-is-career-information-and-advice by Sandra McNally
https://wol.iza.org/articles/is-the-return-to-education-the-same-for-everybody by Douglas Webber
https://wol.iza.org/articles/boom-in-university-graduates-and-risk-of-underemployment by Gustavo A. Yamada and Pablo Lavado
Foto by Evangeline Shaw on Unsplash