Essays on the schooling expectations and risky behaviors of young adults

This dissertation studies the causes and consequences of risky behavior among youths, particularly as they are related to youths' expectations of future events.;The first chapter, "Forward-Thinking Teens: The Effects of College Costs on Adolescent Risky Behavior," analyzes the effect of college costs on teenagers' engagement in risky behaviors. I find that lower college costs in teenagers' states of residence raise their subjective expectations regarding future college attendance. This in turn leads to a reduction in teenage substance use and sexual partnership. These results imply that policies that improve teenagers' educational prospects may be effective tools for reducing youthful involvement in such behaviors.;"Understanding the Link between Young Adults' College Expectations and Subsequent College Outcomes," the second chapter, seeks to shed light on the process by which teenagers form expectations about future events. Combining data on respondents' subjective college expectations as teenagers with data on their eventual college outcomes, I show teenagers' expectations are not rational in that they are systematically positively biased. Moreover, youths' AFQT scores (a measure of scholastic aptitude) are negatively correlated with expectation bias. Conditional on AFQT score, family income and race/ethnicity have little or no additional effect on the precision of youths' expectations. These results suggest that more careful consideration of expectations in economic research may lead to better inference on the decision-making processes of youths.;In the third chapter, "The Incidence of the Healthcare Costs of Smoking," coauthor Benjamin Schwab and I seek to understand why smokers earn less than non-smokers in the paid labor market. We find that smokers who hold employer-sponsored health insurance (ESI) receive significantly lower wages than their non-smoking peers, while smokers who are not insured through their employer endure no such wage penalty. Our results have two implications: first, the incidence of smokers' elevated medical costs appears to be borne by smokers themselves in the form of lower wages. Second, differences in healthcare costs between smokers and non-smokers are a significant source of the smoker's wage gap.