October 29th, 2019
"The Fall of the Aspirations Wall: Educational Aspirations, Achievement and Societal Change"
We use the German Reunification experiment to study how an exogenously changed environment (from state socialism to capitalist democracy) affects aspirations and future outcomes. We analyze whether, and how quickly, individuals' educational aspirations adapt, their long-term impact and the underlying mechanisms. Using differences across cohorts induced by Reunification timing, we show that shortly after, educational aspirations among high school students in East Germany increase substantially and translate into sizable increases of completing university entrance certificate five years later. Perceived educational returns, economic preferences ("consumerism"), socio-political attitudes ("individualism") and psychological well-being adapt quickly and are directly linked to changes in aspirations.