Childhood confidence, schooling, and the labor market: Evidence from the PSID

Abstract

We link over- and under-confidence in math at ages 8-11 to education and employment outcomes 22 years later among the children of PSID households. About twenty percent of children have markedly biased beliefs about their math ability, and beliefs are strongly gendered. Conditional on measured ability, childhood over- and under-confidence predict adolescent test scores, high school and college graduation, majoring or working in STEM, earnings, and unemployment. Across all metrics, higher confidence predicts better outcomes. These biased beliefs persist into adulthood and could continue to affect outcomes as respondents age, since intermediate outcomes do not fully explain these long-run correlations.