Schooling as experimentation: a reappraisal of the postsecondary dropout phenomenon

Dropout from postsecondary schooling is widely considered a social problem. In fact, reducing dropout would not necessarily make society better off. This conclusion derives from analysis of the process of postsecondary enrollment and completion. The key observation is that students contemplating enrollment do not know whether completion will be feasible or desirable. Hence, enrollment is a decision to initiate an experiment, one of whose possible outcomes is dropout. Experiments should be evaluated by their ex ante expected return, not by their ex post success rate. It follows that, told only the completion rate of enrolled students, one cannot judge whether the right enrollment decisions have been made.