THE EFFECTIVENESS OF INFORMATION AND INCENTIVES IN INFLUENCING THE SCHOOLING BEHAVIOR OF YOUTH AT RISK: WHY WE KNOW SO LI'ITLE

In attempting to encourage at-risk students to remain in school, two approaches are.in use: information strategies, which assume that with accurate information students will choose to continue their educations, and incentive strategies, which assume that something has to be done to enhance the value of education if students are to choose to stay in school. Social science research on schooling behavior has not yet provided the knowledge necessary to evaluate the effectiveness of these two approaches, since we do not know how youth form expectations about the returns to schooling and how such expectations influence behavior. This paper diagnoses the shortcomings of present research and prescribes innovations in social science practice that may lead to credible evaluation of information and incentive policies. In it I lay out elements of a new program of research on schooling behavior and expectation formation based on decision-theoretic analysis of subjective data. The methodological issues addressed here are relevant to the evaluation of information and incentive policies in other areas as well, where the unwillingness of economists to exploit subjective data and the failure of social psychologists to formalize their ideas have combined to limit our understanding of human behavior. 1