Academic journal article Atlantic Economic Journal

Socioeconomic Factors and Business Student Plans and Expectations

Academic journal article Atlantic Economic Journal

Socioeconomic Factors and Business Student Plans and Expectations

Article excerpt

JEL A20

The long-term economic prosperity experienced throughout the United States' history has enabled newer generations of Americans to surpass the standard of living of their parents. While that certainly has been most evident in the post-depression twentieth century, it appears the law of diminishing returns has affected this facet of our lives. In fact, early in this new millennium, it appears we might have reached the stage of negative returns as, for the first time in our history, there is a real possibility our children's economic well-being may not be as high as their parents. This paper studies the expectations of business students regarding their financial futures.

Psychologists have long postulated that college students tend to overestimate their abilities and expectations of their futures after they graduate. For example, students often overestimate their grades at the end of a university-level course. Male students, students with lower grade point averages (GPA), and students in lower division classes have a greater tendency to overestimate these expectations. This phenomenon has especially been noted among business students.

Researchers have discovered students' interactions with their families, especially concerning financial issues, influence their expectations for economic and financial well-being after they graduate from college. Students who have had open and pleasant interactions with their parents about these issues have more ambitious plans and expectations about their futures.

Despite federal and state laws (e.g., the Equal Pay Act of 1963) to equalize pay and opportunities for males and females, gender continues to play a role in the future salary expectations and career plans of students. Lower paying jobs (e.g., elementary school teachers, nursing, home health care, child care, social work, etc.) continue to attract more females, while higher paying jobs (e.g. accounting, engineering, medical doctors, lawyers, etc.) continue to be more attractive for males.

This study seeks to identify socioeconomic determinants of business students' plans and expectations of their post-graduation futures. A survey administered to undergraduate business students at a university in the southwestern United States yielded 129 responses, 64 from females and 65 from males. Respondents ranged from 20 to 47 years of age with 89% falling between 21 and 25. Their major fields were as follows: marketing (40.3%), management (20.9%), general business (17.8%), finance (10.9%), accounting (7.8%), and economics (2.3%).

The two dependent variables are the future education plans of students and the starting salary these students expect to receive upon graduation. The independent variables included are gender, age, GPA, and major. In addition, family-related independent variables were also included: household income of the students' parents, size of immediate families, and the students' order of birth. …

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