Childhood Determinants of Risk Aversion: The Long Shadow of Compulsory Education
AbstractWe study the determinants of individual attitudes towards risk and, in particular, why some individuals exhibit extremely high risk aversion. Using data from the Panel Study of Income Dynamics we find that a policy induced increase in high school graduation rates leads to significantly fewer individuals being highly risk averse in the next generation. Other significant determinants of risk aversion are age, sex, and parents' risk aversion. We verify that risk aversion matters for economic behavior in that it predicts individuals' volatility of income.
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 C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 7999.
Date of creation: Sep 2010
Date of revision:
Contact details of provider:
Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
Other versions of this item:
- Dmytro Hryshko & María José Luengo‐Prado & Bent E. Sørensen, 2011. "Childhood determinants of risk aversion: The long shadow of compulsory education," Quantitative Economics, Econometric Society, vol. 2(1), pages 37-72, 03.
- Hryshko, Dmytro & Luengo-Prado, Maria Jose & Sorensen, Bent, 2011. "Childhood Determinants of Risk Aversion: The Long Shadow of Compulsory Education," Working Papers 2011-2, University of Alberta, Department of Economics.
- E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
- I29 - Health, Education, and Welfare - - Education - - - Other
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.:
- Mark Kazarosian, 1997.
"Precautionary Savings-A Panel Study,"
The Review of Economics and Statistics,
MIT Press, vol. 79(2), pages 241-247, May.
- Abowd, John M & Card, David, 1989.
"On the Covariance Structure of Earnings and Hours Changes,"
Econometric Society, vol. 57(2), pages 411-45, March.
- John M. Abowd & David Card, 1986. "On the Covariance Structure of Earnings and Hours Changes," NBER Working Papers 1832, National Bureau of Economic Research, Inc.
- Monica Paiella & Luigi Guiso, 2004.
"The Role of Risk Aversion in Predicting Individual Behaviour,"
Econometric Society 2004 Latin American Meetings
222, Econometric Society.
- Luigi Guiso & Monica Paiella, 2005. "The Role Of Risk Aversion In Predicting Individual Behavior," Temi di discussione (Economic working papers) 546, Bank of Italy, Economic Research and International Relations Area.
- Guiso, Luigi & Paiella, Monica, 2004. "The Role of Risk Aversion in Predicting Individual Behaviours," CEPR Discussion Papers 4591, C.E.P.R. Discussion Papers.
- Dohmen, Thomas J & Falk, Armin & Huffman, David & Schupp, Jürgen & Sunde, Uwe & Wagner, Gert Georg, 2006.
"Individual Risk Attitudes: New Evidence from a Large, Representative, Experimentally-Validated Survey,"
CEPR Discussion Papers
5517, C.E.P.R. Discussion Papers.
- Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde & Jurgen Schupp & Gert Wagner, 2005. "Individual risk attitudes: New evidence from a large, representative, experimentally-validated survey," Framed Field Experiments 00140, The Field Experiments Website.
- Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde & Jürgen Schupp & Gert G. Wagner, 2005. "Individual Risk Attitudes: New Evidence from a Large, Representative, Experimentally-Validated Survey," Discussion Papers of DIW Berlin 511, DIW Berlin, German Institute for Economic Research.
- Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde & Juergen Schupp & Gert Wagner, 2005. "Individual Risk Attitudes: New Evidence from a Large, Representative, Experimentally-Validated Survey," Working Papers 2096, The Field Experiments Website.
- Dohmen, Thomas & Falk, Armin & Huffman, David B. & Sunde, Uwe & Schupp, Jürgen & Wagner, Gert G., 2005. "Individual Risk Attitudes: New Evidence from a Large, Representative, Experimentally-Validated Survey," IZA Discussion Papers 1730, Institute for the Study of Labor (IZA).
- Ann Huff Stevens & Marianne Page & Philip Oreopoulos, 2005.
"The Intergenerational Effects of Compulsory Schooling,"
519, University of California, Davis, Department of Economics.
- Philip Oreopoulos & Marianne E. Page, 2006. "The Intergenerational Effects of Compulsory Schooling," Journal of Labor Economics, University of Chicago Press, vol. 24(4), pages 729-760, October.
- Luigi Guiso & Luigi Pistaferri & Fabiano Schivardi, 2001.
"Insurance within the Firm,"
Temi di discussione (Economic working papers)
414, Bank of Italy, Economic Research and International Relations Area.
- Guiso, Luigi & Pistaferri, Luigi & Schivardi, Fabiano, 2001. "Insurance Within the Firm," CEPR Discussion Papers 2793, C.E.P.R. Discussion Papers.
- Luigi Guiso & Luigi Pistaferri & Fabiano Schivardi, 2002. "Insurance within the firm," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 C3-1, International Conferences on Panel Data.
- Daniel J. Benjamin & Sebastian A. Brown & Jesse M. Shapiro, 2006. "Who is “Behavioral”? Cognitive Ability and Anomalous Preferences," Levine's Working Paper Archive 122247000000001334, David K. Levine.
- repec:fip:fedfap:2004-12 is not listed on IDEAS
- Sanjaya, Muhammad Ryan, 2013. "On the source of risk aversion in Indonesia using micro data 2007," Economics Discussion Papers 2013-33, Kiel Institute for the World Economy.
- Howard, Gregory E. & Roe, Brian E., 2011. "Comparing the Risk Attitudes of U.S. and German Farmers," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114528, European Association of Agricultural Economists.
- Daiji Kawaguchi, 2013. "Fewer School Days, More Inequality," Global COE Hi-Stat Discussion Paper Series gd12-271, Institute of Economic Research, Hitotsubashi University.
- Leuermann, Andrea & Necker, Sarah, 2011. "Intergenerational transmission of risk attitudes: A revealed preference approach," Freiburg Discussion Papers on Constitutional Economics 11/4, Walter Eucken Institut e.V..
- Alberto Bisin & Thierry Verdier, 2010. "The Economics of Cultural Transmission and Socialization," NBER Working Papers 16512, National Bureau of Economic Research, Inc.
- Andrea Leuermann & Sarah Necker, 2011. "Intergenerational Transmission of Risk Attitudes: A Revealed Preference Approach," SOEPpapers on Multidisciplinary Panel Data Research 412, DIW Berlin, The German Socio-Economic Panel (SOEP).
- Dimitrios Christelis & Loreti I. Dobrescu & Alberto Motta, 2011.
"Early Life Conditions and Financial Risk–Taking in Older Age,"
CSEF Working Papers
285, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
- Christelis, Dimitris & Dobrescu, Loretti I. & Motta, Alberto, 2011. "Early life conditions and financial risk-taking in older age," CFS Working Paper Series 2011/28, Center for Financial Studies (CFS).
- Loretti Dobrescu & Dimitris Christelis & Alberto Motta, 2012. "Early Life Conditions and Financial Risk-taking in Older Age," Working Papers 201208, ARC Centre of Excellence in Population Ageing Research (CEPAR), Australian School of Business, University of New South Wales.
- Darragh Flannery & Cathal O’Donoghue, 2011. "The Life-cycle Impact of Alternative Higher Education Finance Systems in Ireland," The Economic and Social Review, Economic and Social Studies, vol. 42(3), pages 237â270.
- Deck, Cary & Lee, Jungmin & Reyes, Javier A. & Rosen, Christopher C., 2013. "A failed attempt to explain within subject variation in risk taking behavior using domain specific risk attitudes," Journal of Economic Behavior & Organization, Elsevier, vol. 87(C), pages 1-24.
- Hübler, Olaf, 2012.
"Are Tall People Less Risk Averse than Others?,"
IZA Discussion Papers
6441, Institute for the Study of Labor (IZA).
- Olaf Hübler, 2012. "Are Tall People Less Risk Averse than Others?," SOEPpapers on Multidisciplinary Panel Data Research 457, DIW Berlin, The German Socio-Economic Panel (SOEP).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.