BEE2045 - 2025 - Lecture 8 - Aspirations

Course Overview

  • Course Title: Economics of Diversity and Inclusion (BEE2045)

  • Institution: University of Exeter

  • Focus: Economics and Identity

Lecture Recording

  • This lecture is being recorded for educational purposes.

Key Topics of the Lecture

  • Aspirations in economics

  • Female leaders and their impact on aspirations

  • Application of aspirations in education and politics

Introduction to Aspirations

  • Definition of aspirations in the context of economics.

Main Source

  • Article: "Aspirations and Economic Behavior"

  • Authors: Garance Genicot and Debraj Ray

  • Publication Details: Annual Review of Economics, Vol. 12:715-746 (August 2020)

  • Emails: gg58@georgetown.edu; debraj.ray@nyu.edu

  • Affiliations:

    • Department of Economics, Georgetown University

    • Department of Economics, New York University

    • Department of Economics, University of Warwick

Individual Preferences

  • Traditional View: Preferences seen as privately determined and immutable.

  • Modern Understanding: Preferences shaped by societal factors.

Avoiding Complexity

  • Economists often hesitate to explore social foundations of preferences due to complexity.

  • Simplistic attribution to individual preferences can ignore broader economic patterns (e.g., gender wage gap).

Key Model Insights

  • Aspirations influence utility - exceeding aspirations leads to additional utility.

  • Importance of both satisfaction and disappointment related to aspirations.

  • Multiple dimensions of aspirations exist (e.g., economy, self-esteem, peer recognition).

Key Model Predictions

  • Higher aspirations may reduce happiness in the short-term due to increased efforts.

  • Economic improvements can elevate personal aspirations, potentially leading to diminished happiness.

  • Evidence shows higher societal incomes correlate with lower individual well-being while controlling for personal income.

Changes in Aspirations

  • Increases in aspirations may drive effort and lead to improved outcomes (income/welfare).

  • Limitations: continuous aspiration increases without resources can lead to frustration and decreased investment.

Applications in Education

Aspirations of Immigrant Children

  • Research shows immigrant children, especially boys, in Italy may have lower aspirations than native peers.

  • Programs like tutoring can enhance aspirations and educational outcomes.

Realistic Aspirations

  • Evidence from France: Lowering unrealistic aspirations leads to reduced grade repetition and dropout rates.

  • Aspirations need to be balanced: While high aspirations motivate, overly ambitious goals may discourage.

Influences on Aspirations

  • Factors influencing aspirations include socioeconomic status, community norms, educational policies, and role models.

Addressing Economic Inequality

  • Increased economic aspirations among the poorest may also lead to frustration and reduced investment.

  • Multi-dimensional models suggest alternative avenues for satisfaction when primary aspirations are unfulfilled.

Rising Inequality and Its Effects

  • Economic inequality can escalate aspirations among lower-income groups, initially leading to increased investments.

  • If aspirations escalate beyond reach, it can result in a drop in economic investments and shift focus to consolation prizes.

Group Dynamics and Nationalism

  • High inequality may lead to increased racism and nationalism as alternate sources of group dominance become attractive.

  • Political exploitation of these sentiments in times of economic hardship.

Responses of Minority Groups

  • Social exclusion may shift aspirations towards economic investments rather than cultural or social achievements.

  • Examples include women and lower castes in India, who may increase economic efforts when socially marginalized.

Impact of Female Leadership

Policy Experiment in India

  • Introduction of gender quotas positively impacts aspirations and educational attainment for girls.

  • Historical context: growth in female representation in village councils correlates with increased aspirations among girls.

Parents’ Aspirations

  • Gender disparities in parental aspirations for children influenced by the presence of female leaders.

Changes in Teenagers’ Aspirations

  • Similar reductions in gaps of aspirations found in adolescents as seen in parents, driven by increased aspirations for girls.

Education and Time Use

  • The role of female leaders linked to decreased domestic workload for girls, allowing more educational focus.

Mechanism of Change

  • Female leaders influence through policies and by serving as role models for aspirations.

Long-term Effects

  • Exposure to female leaders leads to improved perceptions of women in leadership and may encourage more female leaders in future political spaces.

Conclusion

  • Female leadership has significant impacts on community aspirations and educational outcomes, primarily through role-modelling rather than immediate policy changes.

  • The model suggests aspirational outcomes are driven by changing societal views and exposure to leadership.

Next Lecture

  • Upcoming topics will delve into the economic and business case for diversity.