Risk Aversion And Major Choice: Evidence From Italian Students
AbstractDoes the choice of the field of study depend on individual risk aversion? The direction of the relationship between individual risk attitudes and type of college major chosen is potentially ambiguous. On the one hand, risk adverse individuals may prefer majors allowing high returns on the labour market; on the other hand, if these majors expose students to a higher probability of dropping out, those who are more risk adverse may be induced to choose less challenging fields. Using data from a sample of students enrolled in 2009 at a middle-sized Italian public University, we find that, controlling for a large number of individual characteristics, including cognitive abilities, personality traits and family background, more risk adverse students are more likely to choose any other field (Humanities, Engineering and Sciences) compared to Social Sciences. We interpret this result considering that some of these fields, such as Humanities, allow to reduce the risk of dropping out, while others (such as Engineering and Sciences)involve a lower risk on the labour market. It also emerges that the effect of risk aversion on major choice is related to student ability. Risk adverse students characterized by high abilities tend to prefer Engineering, while the propensity of risk adverse students to enrol in Humanities decreases when ability increases, suggesting that the attention paid to labour market risks and drop out risks varies according to student skills.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Università della Calabria, Dipartimento di Economia, Statistica e Finanza (Ex Dipartimento di Economia e Statistica) in its series Working Papers with number 201107.
Length: 19 pages
Date of creation: Jul 2011
Date of revision:
Contact details of provider:
Postal: Università della Calabria, Dipartimento di Economia, Statistica e Finanza, Ponte Pietro Bucci, Cubo 0/C, I-87036 Arcavacata di Rende, CS, Italy
Phone: +39 0984 492413
Fax: +39 0984 492421
Web page: http://www.unical.it/portale/strutture/dipartimenti_240/disesf/
More information through EDIRC
Risk aversion; College choice; Education;
Find related papers by JEL classification:
- I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
- Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Social and Economic Stratification
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-07-21 (All new papers)
- NEP-CBE-2011-07-21 (Cognitive & Behavioural Economics)
- NEP-EDU-2011-07-21 (Education)
- NEP-LAB-2011-07-21 (Labour Economics)
- NEP-NEU-2011-07-21 (Neuroeconomics)
- NEP-UPT-2011-07-21 (Utility Models & Prospect Theory)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Christiansen, Charlotte & Joensen, Juanna Schrøter & Nielsen, Helena Skyt, 2006.
"The Risk-Return Trade-Off in Human Capital Investment,"
IZA Discussion Papers
1962, Institute for the Study of Labor (IZA).
- Christiansen, Charlotte & Joensen, Juanna Schroter & Nielsen, Helena Skyt, 2007. "The risk-return trade-off in human capital investment," Labour Economics, Elsevier, vol. 14(6), pages 971-986, December.
- Charlotte Christiansen & Juanna Schröter Joensen, 2006. "The Risk-Return Trade-Off in Human Capital Investment," Economics Working Papers 2006-02, School of Economics and Management, University of Aarhus.
- Jean Luc De Meulemeester & Denis Rochat, 2001.
"Rational choice under unequal constraints: the example of Belgian higher education,"
ULB Institutional Repository
2013/1565, ULB -- Universite Libre de Bruxelles.
- Rochat, Denis & Demeulemeester, Jean-Luc, 2001. "Rational choice under unequal constraints: the example of Belgian higher education," Economics of Education Review, Elsevier, vol. 20(1), pages 15-26, February.
- Asena Caner & Cagla Okten, 2008.
"Risk and Career Choice: Evidence from Turkey,"
0803, TOBB University of Economics and Technology, Department of Economics.
- Arcidiacono, Peter, 2002.
"Ability Sorting and the Returns to College Major,"
02-26, Duke University, Department of Economics.
- Christian Belzil & Marco Leonardi, 2006.
"Can Risk Aversion Explain Schooling Attainments? Evidence From Italy,"
0607, Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure.
- Belzil, Christian & Leonardi, Marco, 2007. "Can risk aversion explain schooling attainments? Evidence from Italy," Labour Economics, Elsevier, vol. 14(6), pages 957-970, December.
- Belzil, Christian & Leonardi, Marco, 2006. "Can Risk Aversion Explain Schooling Attainments? Evidence from Italy," IZA Discussion Papers 2123, Institute for the Study of Labor (IZA).
- Christian Belzil & Marco Leonardi, 2007. "Can Risk Aversion Explain Schooling Attainments?: evidence from Italy," Post-Print halshs-00201351, HAL.
- Christian Belzil & Marco Leonardi, 2006. "Can Risk Aversion Explain Schooling Attainments? Evidence From Italy," Post-Print halshs-00142551, HAL.
- Maria De Paola, 2010. "The Determinants Of Risk Aversion: The Role Of Intergenerational Transmission," Working Papers 201016, Università della Calabria, Dipartimento di Economia, Statistica e Finanza (Ex Dipartimento di Economia e Statistica).
- Paolo Buonanno & Dario Pozzoli, 2009.
"Early Labour Market Returns to College Subject,"
CEIS, vol. 23(4), pages 559-588, December.
- Paolo Buonanno & Dario Pozzoli, 2007. "Early Labour Market Returns to College Subject," Working Papers 0705, University of Bergamo, Department of Economics.
- Buonanno, Paolo & Pozzoli, Dario, 2008. "Early Labour Market Returns to College Subjects," Working Papers 08-10, University of Aarhus, Aarhus School of Business, Department of Economics.
- Giorgio Di Pietro & Andrea Cutillo, 2006. "University Quality and Labour Market Outcomes in Italy," LABOUR, CEIS, vol. 20(1), pages 37-62, 03.
- Ignacio Palacios-Huerta, 2001.
"An Empirical Analysis of the Risk Properties of Human Capital Returns,"
2001-10, Brown University, Department of Economics.
- Ignacio Palacios-Huerta, 2003. "An Empirical Analysis of the Risk Properties of Human Capital Returns," American Economic Review, American Economic Association, vol. 93(3), pages 948-964, June.
- Gabriele Ballarino & Massimiliano Bratti, 2009. "Field of Study and University Graduates' Early Employment Outcomes in Italy during 1995-2004," LABOUR, CEIS, vol. 23(3), pages 421-457, 09.
- Giorgio Brunello & Maria De Paola & Vincenzo Scoppa, 2010.
"Peer Effects In Higher Education: Does The Field Of Study Matter?,"
Western Economic Association International, vol. 48(3), pages 621-634, 07.
- Giorgio Brunello & Maria De Paola & Vincenzo Scoppa, 2009. "Peer Effects in Higher Education: Does the Field of Study Matter?," "Marco Fanno" Working Papers 0092, Dipartimento di Scienze Economiche "Marco Fanno".
- Jeff Grogger & Eric Eide, 1995. "Changes in College Skills and the Rise in the College Wage Premium," Journal of Human Resources, University of Wisconsin Press, vol. 30(2), pages 280-310.
- Montmarquette, Claude & Mahseredjian, Sophie & Houle, Rachel, 2001. "The determinants of university dropouts: a bivariate probability model with sample selection," Economics of Education Review, Elsevier, vol. 20(5), pages 475-484, October.
- Richard Sabot & John Wakeman-Linn, 1991. "Grade Inflation and Course Choice," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 159-170, Winter.
- Alexandra C. Achen & Paul N. Courant, 2009. "What Are Grades Made Of?," Journal of Economic Perspectives, American Economic Association, vol. 23(3), pages 77-92, Summer.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Giovanni Dodero).
If references are entirely missing, you can add them using this form.