Salaried workers and entrepreneurs are typically treated as distinct agents in economic models. Yet, in many low-income settings, workers frequently transition between salaried and self-employment. In a stylized job-search model augmented with business investment and income, I show that workers can face a tradeoff between business investment and job search efforts. Furthermore, I show how misperceptions about the salaried job market can lead them to make sub-optimal decisions regarding this tradeoff. Collecting first-hand data from micro-entrepreneurs in Tanzania, I find systematic overestimation of the likelihood of transitioning from entrepreneurship to salaried employment and underestimation of the business survival rates. Micro-entrepreneurs in active job search invest less time and capital in their businesses and generate lower profits, suggesting that job search efforts crowd out business investment. Moreover, job search generates significant direct and indirect costs, estimated respectively at 13\% and 30\% of monthly profits. Using a randomized control trial, I test for the responsiveness of beliefs and behaviors to information about the actual transition rates from entrepreneurship to salaried work. Treated respondents revised downward their perceived returns to job search and became more willing to accept a hypothetical salaried job offering their current earnings level. However, the treatment did not significantly impact medium-term beliefs, nor investments in job-search or business.

The transition from school to the labor market presents significant challenges. This is particularly the case in low- and middle-income countries where the youth population attending primary and secondary school is expanding rapidly and over-optimism combined with limited information can lead to suboptimal decision-making regarding further education and other career preparation choices. We design and test through a cluster-randomized controlled trial a scalable low-cost intervention designed to help secondary school students in Tanzania develop hopeful yet realistic career pathways. This is done through a structured, edutainment podcast series and teacher-led classroom discussions. We show that treated students perform better academically, with a significant increase in national exam success and a higher likelihood of selection into further education. Additionally, self-employment rates and income levels increase. These outcomes are driven by enhanced hope ---characterized by improved agency and pathway clarity--- and by an increase in the likelihood of being active (thus gaining work experience) shortly after taking the exam. Our findings highlight the potential of structured guidance through edutainment in fostering better education and employment outcomes.

We use linked administrative data from Uganda to track student progression from primary school through university scholarship admission, documenting large leaks in the education pipeline at every stage. Many high-performing students from poorer districts exit before upper secondary school, so the pool eligible for selective public university admission is highly socioeconomically stratified. Merit scholarships are heavily concentrated in a small number of elite secondary schools in the Kampala metropolitan area, implying that financial aid primarily rewards earlier advantages. The results highlight that tertiary merit aid alone cannot equalize access without upstream reforms to broaden access to basic and secondary education. 

This paper explores overconfidence and its impact on students' expectations and behaviors within the context of secondary education in Tanzania. We find that 97% of students in the final grade of junior secondary school expect to perform very well in the national Certificate of Secondary Education Examination (CSEE), with only 35% achieving their anticipated outcomes. This overconfidence is evident in all three forms of overconfidence—overestimation, overplacement, and overprecision—and correlates with suboptimal study strategies, unrealistic aspirations, and a lack of contingency plans. We also highlight the role of limited information in shaping students’ expectations and behaviors, with a particular focus on how feedback can influence their decision-making. The paper contributes to educational economics by integrating psychological insights and examining the effects of information constraints in Sub-Saharan Africa, where students often lack guidance from parents who have limited formal education. Additionally, it emphasizes the broader implications of overconfidence for educational track misallocation and the underappreciation of vocational education in regions with high youth underemployment. Through these insights, we underscore the importance of addressing overconfidence to improve educational outcomes and career preparedness in Tanzania and similar contexts.

We study the labor market effects of entering university through merit-based public scholarships and affirmative action quotas in Uganda, and calculate the marginal value of this use of public funds. We identify causal effects using regression discontinuities at the exam score cutoffs for the scholarships and quotas, drawing on the universe of administrative data on applications and exam scores from 2009-2019. We measure employment and wage outcomes using administrative tax records from the Uganda Revenue Authority. Ours is the first study to identify the labor market impacts of university financial aid in an African context.