Subjective Expectations and Schooling Choices in Latin America and the Caribbean Marcelo Gantier a Rafael Novella b Andrea Repetto c December 29, 2022 Abstract Expectations about future labour market opportunities are essential for education and labour market decisions. This paper uses data from a survey of youths in seven Latin American and Caribbean countries to explore the role of expected returns to education on school- ing decisions. We find substantial variation in subjective expectations partly explained by youths’ socioeconomic characteristics. Also, we find that enrolment in tertiary education is positively related to perceived education returns. Furthermore, the association of ex- pectations with schooling choices differs across individuals in relevant domains, including gender, skills, and socioeconomic background. Our results suggest that public policies might impact choices and reduce socioeconomic gaps in schooling by providing informa- tion on education returns. Keywords: returns to education, perceived returns, college enrolment, youths JEL codes: I24, I25, I26, J13, O15, O54. Word count: 9,064 a Paris School of Economics, Paris, France. b University College London, London, UK. https://orcid.org/0000-0002-2139-3291 c Universidad Adolfo Ib´ a˜ nez, Santiago, Chile. https://orcid.org/0000-0003-2378-9684 Corresponce Address: Andrea Repetto, Universidad Adolfo Ib´ a˜ nez, Diagonal Las Torres 2640, Santiago, Chile. E-mail: andrea.repetto@uai.cl 1