Is studying worth it? Students' beliefs about costs, economic returns and risks of failure of the investment in higher education

This paper starts with a critical review of the literature on the role of beliefs in affecting social inequality in Higher Education (HE) and provides an empirical assessment of students' beliefs about costs, economic returns and risks of failure in Italian HE. This paper provides, for the first time in Italy, empirical evidence regarding the determinants of students' beliefs related to HE. Moreover, it attempts to assess the discrepancy between 'subjective beliefs' and 'objective values'. Our results point to the existence of systematic differences between different social strata. Students from more privileged social backgrounds tend to over-estimate economic returns to HE, whereas all students tend to over-estimate the costs of HE. Taken together, these results might contribute to explain the existence of the social-background gradient in HE participation in Italy. However, the paper concludes considering that 'observational studies' should be complemented by studies based on randomized trials, for the latter allow to overcome long-standing problems in observational settings - like omitted-variable bias and reverse causality - that may undermine results about the role of students' beliefs.