Subjective expectations and individual decisions of future graduate students Andrea Catalina ...

226 Pages·2017·1.38 MB·English

by  Adeline Delavande

Subjective expectations and individual decisions of future
graduate students

Andrea Catalina Blanco Moreno
A thesis submitted for the degree of Doctor of Philosophy
in Economics

Institute for Social and Economic Research

University of Essex

June, 2018
A Papá y a María del Pilar: el reino de los Inmortales.
A Mamá, Ximena y Andrés: la vida misma.

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Contents
DECLARATIONS ........................................................................................................ 9
ACKNOWLEDGEMENTS ........................................................................................ 10
SUMMARY ................................................................................................................ 13
INTRODUCTION ....................................................................................................... 14
CHAPTER 1. SUBJECTIVE MIGRATION EXPECTATIONS................................ 25
1.1 Introduction ...................................................................................................... 25
1.2 Migration in Pakistan ............................................................................................ 31
1.3 A model of migration ............................................................................................ 34
1.4 Study design .......................................................................................................... 36
1.4.1 Sample ............................................................................................................ 36
1.4.2 The educational institutions ............................................................................ 37
1.4.3 Sample Characteristics .................................................................................... 39
1.4.5 Eliciting migration expectations ................................................................... 42
1.4 Other determinants of migration. .......................................................................... 45
1.5 Empirical Results ............................................................................................. 49
1.5.1 GLM estimates ................................................................................................ 49
1.5.2 Individual fixed effect estimations ................................................................. 57
1.6 Conclusion ........................................................................................................ 60
CHAPTER 2: INTER-REGIONAL GRADUATE MIGRATION FROM BOGOTÁ
COLOMBIA: AN APPROACH USING SUBJECTIVE EXPECTATIONS ............. 62
2.1 Introduction ........................................................................................................... 62
2.2. Literature Review ................................................................................................. 67
2.2.1 Inter-regional migration of university graduates ............................................ 67
2.2.6 Eliciting probabilities of migration and Measuring Expectations .................. 74
2.3 Overview of Colombia .......................................................................................... 77
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2.3.1 Regions of Colombia ...................................................................................... 77
2.3.2 Colombian Higher Education System ............................................................ 83
2.4 Theoretical model .................................................................................................. 84
2.5 Study Design ......................................................................................................... 86
2.5.1 Data ................................................................................................................. 89
2.5.2 Eliciting migration expectations and self-perceptions of the cities ................ 96
2.6. Modelling Migration intentions to Arauca, Quibdó and Riohacha .................... 105
2.7. Conclusions ........................................................................................................ 115
CHAPTER 3 SUBJECTIVE EXPECTATIONS AND PERSONAL TRAITS:
ENTREPRENEURIAL INTENTIONS OF UNIVERSITY GRADUATES IN
BOGOTÁ, COLOMBIA. .......................................................................................... 118
3.1 Introduction ......................................................................................................... 118
3.2 Literature review ................................................................................................. 121
3.2.1The decision to become an entrepreneur according to the economic theory. 122
3.2.2 The entrepreneurial decision according to management and psychology
theory. .................................................................................................................... 125
3.2.3 Entrepreneurial decision studies in Colombia .............................................. 129
3.3 The institutional context ...................................................................................... 131
3.3.1 Firms in Colombia ........................................................................................ 131
3.3.2 Higher Education in Colombia ..................................................................... 132
3.4 Theoretical Model ............................................................................................... 135
3.5 Data ..................................................................................................................... 139
3.5.1 Sample .......................................................................................................... 139
3.5.2 Preferences and non-cognitive traits related to becoming an entrepreneur .. 144
3.5.3 Eliciting job market expectations ................................................................. 146
3.5.4 Analysis of the item “non response” ............................................................ 156
3.6 The determinants of entrepreneurial intentions ................................................... 161
3.7 Conclusions and discussion ................................................................................. 170
CONCLUSION ......................................................................................................... 173
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APPENDICES ........................................................................................................... 206
Appendix 1.1 GLM estimates when the wage offer is twice the highest expected wage
in Pakistan. Dependent variable: Subjective probability of migration ...................... 207
Appendix 1.2 GLM estimates when the wage offer is ten times the highest expected
wage in Pakistan. Dependent variable: Subjective probability of migration ............ 208
Appendix 1.3 Full set of estimates of a GLM model with interactions .................... 209
Appendix 1.4 Oaxaca decomposition for four major determinants of the probability of
migration: expected gain of migration, individual preferences, Opinion of Pakistan
and Opinion of the arrival country. ........................................................................... 211
Appendix 2.1Average marginal effects for a GLM model and OLS estimates of the
probability to migrate to city m given a job offer. City baseline Quibdó. ................ 213
Appendix 2.2. Average marginal effects for a GLM Subsample excluding those who
answer the same probability of migration. ................................................................ 215
Appendix 2.3 Determinants of migration intention to Arauca, Quibdó and Riohacha
Individual Fixed effect estimates. Subsample .......................................................... 217
Appendix 2.4 GLM estimates by destination city and by the four offered wages.
Average marginal effects. .......................................................................................... 218
Appendix 3.1Different questions used in entrepreneurial intentions surveys. .......... 221
Appendix 3.2 Analysis of the Item non response for the cost of stating a firm,
earnings and probability of becoming an entrepreneur. Marginal effects of a logit
model. ........................................................................................................................ 223
Appendix 3.3 Determinants of the decision to become an entrepreneur. Average
marginal effects of a GLM model. Full list of estimates ........................................... 224
Appendix 3.4 Determinants of the decision to become an entrepreneur. Using a
standardized version of the cost variable. Average marginal effects of a GLM model.
................................................................................................................................... 225

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List of tables
Table 1.1 Socio demographic characteristics ................................................................... 39
Table 1.2 Expectations at Age 30 ..................................................................................... 41
Table 1.3 Subjective probabilities of migration for nine different scenarios .................... 43
Table 1.4 Other determinants of migration ....................................................................... 47
Table 1.5 Determinants of the subjective probability of migration to the USA, China and
Saudi Arabia, when the wage is five times the highest expected wage in Pakistan.
Average marginal effects of a GLM model. .............................................................. 52
Table 1.6 Interactions between countries and some determinants of migration. Dependent
variable: probability of migration when wage offered is five times the highest
expected in Pakistan. ................................................................................................. 56
Table 1.7 GLM and Fixed effect model. ........................................................................... 58
Table 1.8 Fixed effect estimations with country interactions. Country base line: Saudi
Arabia. ....................................................................................................................... 59
Table 2.1 Estimated number of migrants during 2015-2020 for population age 20-29 in
Bogotá, Arauca, Quibdó and Riohacha. Thousands of persons. ............................... 81
Table 2.2 Features of the surveyed HEI ............................................................................ 88
Table 2.3 Descriptive Statistics ......................................................................................... 91
Table 2.4. Educational Characteristics of the students ..................................................... 94
Table 2.5 Probabilities of migration to Quibdó, Arauca and Riohacha given four job
offers, expressed in Colombian monthly minimum wage (mw) of 2015 and in USD.
................................................................................................................................. 102
Table 2.6 Probabilities of finding amenities in Bogotá Quibdó Arauca and Riohacha. . 104
Table 2.7 Average marginal effects for a GLM model of the probability to migrate to city
m given a job offer. City baseline Quibdó part A. .................................................. 108
Table 2.7b Average marginal effects for a GLM model of the probability to migrate to
city m given a job offer. City baseline Quibdó part B. ............................................ 110
Table 2.8 Determinants of migration intention to Arauca, Quibdó and Riohacha
Individual Fixed Effect estimates. Dependent variable Probability of migration. .. 112
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Table 2.9 Determinants of migration intention to Arauca, Quibdó and Riohacha. Quantile
regressions at p25 and p75. Dependent variable: Probability of migration............. 114
Table 3.1 Descriptive statistics. ...................................................................................... 141
Table 3.2 Individual Characteristics ............................................................................... 144
Table 3.3 Job market expectations of the students .......................................................... 147
Table 3.4 Analysis of the item non response for: cost of starting a firm, earnings and
probability of becoming an entrepreneur. Marginal effects of a Logit model ........ 158
Table 3.5 Determinants of the Decision to become an Entrepreneur. Dependent variable:
probability of becoming an entrepreneur five years after graduation in a no-debt
scenario. ................................................................................................................... 163
Table 3.6 Three different specifications of the expected earnings. Dependent variable:
probability of becoming an entrepreneur five years after graduation in a no-debt
scenario. ................................................................................................................... 167

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List of Figures
Figure 1.1 Probability of migration to China .................................................................... 44
Figure 1.2 Probability of migration to Saudi Arabia ........................................................ 44
Figure 1.3 Probability of migration to the USA ................................................................ 45
Figure 2.1 Political Administrative Divisions of Colombia. ............................................ 80
Figure 2.2 Probability of migration to Arauca (Arauca) given four different job offers.
................................................................................................................................. 100
Figure 2.3: Probability of migration to Quibdó (Chocó) given four different job offers.
................................................................................................................................. 100
Figure 2.4 Probability of migration to Riohacha (La Guajira) given four different job
offers ........................................................................................................................ 101
Figure 3.1 Subjective Probability of starting a new firm five years after graduation in a no
debt scenario ............................................................................................................ 151
Figure 3.2 Subjective probability of working in her own firm five years after graduation.
................................................................................................................................. 151
Figure 3.3 Expected wage as an employee in Bogotá five years after graduation .......... 153
Figure 3.4 Expected earnings as an entrepreneur in Bogotá five years after graduation 154
Figure 3.5 Self-assessed cost of starting a new firm ....................................................... 155

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Declarations

No part of this thesis has been submitted for another degree.
Chapter 1 is a joint work between my supervisor Professor Adeline Delavande at The
University of Essex and Professor Basit Zafar at The University of Arizona.
The other Chapters in this thesis are exclusively mine.

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Acknowledgements
I would like to thank the precious academic, professional and personal guidance of my
supervisors Professor Adeline Delavande and Dr Renee Luthra. In the four years working
with you I not only acquired many tools to understand my research questions, in fields of
research that I feel passionate about such as subjective expectations and decision theory,
but also in my daily life you provided leading examples of academic brilliance, kindness,
empathy and strength. You may not have noticed, but both of you have leave an
important imprint in the woman, economist and academic that I would like to become.
During my third year of the PhD, Dr Birgitta Rabe kindly agreed to supervise me while
Professor Delavande was on her maternity leave. I am also very grateful to her for
supporting me during the very first transformation of my fieldwork from paper work into
research papers, and thank her for her patience and guidance.
This thesis would not have been possible without the generous funding of the
“Departamento Administrativo de Ciencia Tecnología e Innovación de Ciencia,
Tecnología e Innovación COLCIENCIAS”, the administrative department of Science
Technology and Innovation within the Colombian Government, who granted me the
Francisco Jose de Caldas Scholarship.
Being at ISER has been such a privilege. It has been a wonderful place to work and learn.
I would like to thank the past and present occupiers of 5N.A.07 for providing the value of
authenticity. I would especially like to mention Yamil, Federico, Claudia, Ipek, Franco
Victor and Caroline for their love of coffee and for their friendship that is so like those
South American friendships that come from the gut and nothing less. Special thanks to
Claudia for her smile and friendship and for being the best “godinez officemate”, and to
Federico for being the conscience of the office.
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