Earnings risk and demand for higher education: A cross-section test for Spain
AbstractWe develop a simple human capital model for optimum schooling length when earnings are stochastic, and highlight the pivotal role of risk attitudes and the schooling gradient of earnings risk. We use Spanish data to document the gradient and to estimate individual response to earnings risk in deciding on attending university education, by measuring risk as the residual variance in regional earnings functions. We find that the basic response is negative but that in households with lower risk aversion, the response will be dampened substantially and may even be reversed to positive.
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Bibliographic InfoArticle provided by Universidad del CEMA in its journal Journal of Applied Economics.
Volume (Year): X (2007)
Issue (Month): (May)
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earnings risk; schooling decisions;
Other versions of this item:
- Hartog, Joop & Diaz-Serrano, Luis, 2002. "Earnings Risk and Demand for Higher Education: A Cross-Section Test for Spain," IZA Discussion Papers 641, Institute for the Study of Labor (IZA).
- Joop Hartog & Luis Diaz-Serrano, 2004. "Earnings Risk And Demand For Higher Education: A Cross-Section Test For Spain," Economics, Finance and Accounting Department Working Paper Series, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth n1370804, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
- I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
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CIRANO Working Papers, CIRANO
- Belzil, Christian & Hansen, Jörgen, 2002. "Earnings Dispersion, Risk Aversion and Education," IZA Discussion Papers 513, Institute for the Study of Labor (IZA).
- Christian Belzil & Jörgen Hansen, 2004. "Earnings Dispersion, Risk Aversion and Education," Post-Print, HAL halshs-00180125, HAL.
- Christian Belzil & Jörgen Hansen, 2004. "Earnings Dispersion, Risk Aversion and Education," Working Papers, Groupe d'Analyse et de ThÃ©orie Economique (GATE), Centre national de la recherche scientifique (CNRS), UniversitÃ© Lyon 2, Ecole Normale SupÃ©rieure 0406, Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure.
- Belzil, Christian & Hansen, Jörgen, 2002. "Earnings Dispersion, Risk Aversion and Education," CEPR Discussion Papers, C.E.P.R. Discussion Papers 3600, C.E.P.R. Discussion Papers.
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- Williams, Joseph T, 1979. "Uncertainty and the Accumulation of Human Capital over the Life Cycle," The Journal of Business, University of Chicago Press, University of Chicago Press, vol. 52(4), pages 521-48, October.
- Li, Tong, 2000. "Estimation of nonlinear errors-in-variables models: a simulated minimum distance estimator," Statistics & Probability Letters, Elsevier, Elsevier, vol. 47(3), pages 243-248, April.
- Shigeru Iwata, 2001. "Recentered And Rescaled Instrumental Variable Estimation Of Tobit And Probit Models With Errors In Variables," Econometric Reviews, Taylor & Francis Journals, Taylor & Francis Journals, vol. 20(3), pages 319-335.
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