The Impact of Identity and Self-perception on Labor Market Outcomes

Abstract

This dissertation explores the impact of perception on labor market outcomes in three contexts. The first chapter uses NELS:88 data to examine the differential impact of subject specific self-perception on education choices and labor market outcomes. I find that test scores, grades and perception are all positive and statistically significant indicators of the years of education attained, and dissonance between the measures does not appear to affect investment in education. However, perception outperforms test scores when predicting later wages. These findings challenge the standard assumption that individuals have perfect information about their ability, and points to the importance of understanding self-perception in explaining future success. The second chapter uses 2000 Census data to determine if there are country level differences in the returns to education for Hispanic males who migrated as adults. It also explores if similar country level effects are present in the returns to Hispanic males who migrated as children and in the returns to non-immigrant Hispanic citizens. We find that country level differences are evident in the returns to education for both adult and child immigrants. However, we do not find evidence of country level effects for Hispanic citizens; instead Hispanic citizens converge to a Hispanic mean, indicating that initial advantages for South American and Caribbean immigrants do not persist. The final chapter uses a lab experiment to determine the impact of hair texture and style on labor market outcomes for African American women. The experiment is conducted by altering the photographs of African American women to show their hair in different styles. The photos are randomly paired with a short dossier. Study subjects are asked to use these dossiers to make hiring and wage decisions. I find that while hairstyle may not matter instances where ability is readily calculated, it may have an impact in situations where ability is more ambiguous.