Finding Out Who You Are: A Self-exploration View of Education

Abstract

This paper studies the value and optimal design of education when the main function of schooling is neither the human capital gain nor signaling but self-exploration. Students start school with different beliefs about their own states: whether they are talented hunters or talented gatherers. Education is a statistical experiment through which students exert effort and become more informed about themselves. In this setting, I find that education is valuable to students because it improves their chances of making the optimal choice of specialization. However, only those sufficiently uncertain about themselves find self-exploration valuable enough to exert the necessary effort. The optimal design of education requires that its information structure has greater power in rejecting the state for which the participating students have comparative disadvantage. This result suggests that it may be counterproductive to design education to persuade students into careers with higher observed productivity.