Roles of parent's preferences and student's subjective beliefs on college decision

Abstract

This paper investigates whether and how children’s educational choice is affected by parental preferences and perceived earnings. We assume that individuals choose college major to maximize their own utility which depends on several factors such as personal background, perceived earnings, and importantly parents’ preferences.

The study employs the “Students Survey about Services of Government in Thailand” data to study two educational choice decisions. First, whether to enroll in college. Second, conditional on college enrollment, which major to choose. Empirically, the logistic model and conditional multinomial logit model are estimated. We find strong evidence that parental preferences significantly correlate with educational choice of children, but perceived earnings have no statistically significant relationship with educational choice. Our result calls for a policy that encourages better communication among children, parents and teachers. Such policy could help children choose college major that better aligns with their preferences and ability.