ESSAYS ON HIGHER EDUCATION AND HUMAN CAPITAL INVESTMENTS

This dissertation explores individual's investment in human capital and how that interacts with public policy interventions. I focus on investment in human capital in the form of college education. First, I note the importance of distinguishing college enrollment and college completion when studying human capital investment during adolescence. I then study how teachers could affect individuals' educational outcomes. I then study the determinants of students' college choices. In the first chapter, ``Parental Income, College Enrollment and College Completoin'', I explore the effect of parental income on college matriculation and college completion. I provide novel evidence that, despite little effect on college enrollment rates, transitory parental income when a child is between the ages of 16 and 18 has a substantial impact on college completion rates. To rationalize this pattern, I develop and estimate a model of sequential parental investments in their children's college education. The model incorporates parents' uncertainty over (1) their own future income and (2) the likelihood their child will complete college. Parents facing uncertainty may choose to enroll their child in college, but do not necessarily fund their children's college through degree completion. Parents may also send their children to higher-quality schools that charge higher tuition, but have lower dropout rates. The estimated model reveals that higher-income parents facing uncertainty are more likely to help finance college attendance and to send their children to colleges with higher completion rates, which helps to explain why higher income affects completion but not enrollment. Moreover, using the estimated model, I show that counterfactual policies that reduce uncertainty can increase college completion rates. In the second chapter, ``Teacher Expectations Matter'', which is joint work with Nicholas Papageorge and Seth Gershenson, we show that 10th-grade teacher expectations affect students' likelihood of college completion. Our approach leverages a unique feature of a nationally representative dataset: two teachers provided their educational expectations for each student. Identification exploits teacher disagreements about the same student, an idea we formalize using a measurement error model. We estimate an elasticity of college completion with respect to teachers' expectations of 0.12. On average, teachers are overly-optimistic, though white teachers are less so with black students. More accurate beliefs are counterproductive if there are returns to optimism or if there are socio-demographic gaps in optimism; we find evidence of both. In the third chapter, ``Why Not Choose the Best School? The Determinants of College Choices'', I study the determinants of college choices among the schools offering admission. There is extensive research literature on the determinants of mismatch between student ability and college quality that focuses mostly on how students make application decisions. However, the college decision process consists of several stages and includes students' decision-making processes when deciding on which school's admissions offer to accept. This study uses the National Longitudinal Survey of Youth 1979 Children and Young Adults data to examine how students' choose colleges among the schools offering admission. The analysis shows that while most students choose schools with the highest quality among the available offers, about 40\% of students do not. Student's demographic and socioeconomic backgrounds do not explain such enrollment pattern well. College characteristics in relation to student's characteristics---the degree of overmatch (low ability students at high quality colleges) and the distance to college---affect college choice