Overconfidence in salary expectations after graduation

Document Type

Article

Publication Date

11-16-2020

Abstract

We investigate the degree of overconfidence in earnings percentile expectations one year, five years, and ten years after graduation. The results reveal extreme overconfidence in the expected earnings percentile five years and ten years after graduation. This overconfidence is only marginally explained by various demographic variables, including gender, marital status, socioeconomic status, GPA, and the perceived difficulty in finding a job after graduation. A subsample of “highly motivated” finance students expects to earn less than regular students one and five years after graduation, but is more overconfident about its increasing earnings potential over time. The findings reported here are useful in managing graduates’ expectations as they enter the workforce.

Publication Title

Journal of Education for Business

Volume

95

Issue

8

First Page

513

Last Page

518

Digital Object Identifier (DOI)

10.1080/08832323.2019.1707750

ISSN

08832323

E-ISSN

19403356

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