What do you want to be when you grow up? Local institutional quality and the choice of the fields of study in Italy (2004-2007)

Students’ choices about post-secondary fields of study vary widely across space and time, due to many psychological, social and economic motivations. Regarding these latter, the most important role in steering students’ options has been often ascribed to expected returns from different occupations. This paper emphasizes in particular the link between local institutional quality, the reward structure and students’ preferences. Based on a sample of 80,996 students graduated in Italy in 2004 and 2007, our econometric investigation, controlling for both individual characteristics (gender, residence, family background, high school track) and geographical variables (per capita GDP, industrial specialization), finds that in the choice of the field of study institutional quality definitely matters.