The link between career risk aversion and unemployment duration: Evidence of nonlinear and time-depending pattern
AbstractIn this study, we investigate the nexus between career risk aversion and unemployment duration based on German survey data (GSOEP). Using a direct measurement of career risk aversion, we do not find a statistically significant linear effect from risk aversion on unemployment duration. However, we find significant effects when controlling for a non-linear or time varying correlation between risk aversion and unemployment duration. Our results show that risk aversion is important when deciding when to leave unemployment. This research takes into account the high complexity involved in how risk aversion enters an individual’s decision process during a job search.
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Bibliographic InfoPaper provided by University of Lüneburg, Institute of Economics in its series Working Paper Series in Economics with number 189.
Length: 38 pages
Date of creation: Oct 2010
Date of revision:
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unemployment; risk aversion; duration model;
Find related papers by JEL classification:
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-11-06 (All new papers)
- NEP-LAB-2010-11-06 (Labour Economics)
- NEP-UPT-2010-11-06 (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.:
- Pfeifer, Christian, 2008.
"Risk Aversion and Sorting into Public Sector Employment,"
IZA Discussion Papers
3503, Institute for the Study of Labor (IZA).
- Christian Pfeifer, 2011. "Risk Aversion and Sorting into Public Sector Employment," German Economic Review, Verein für Socialpolitik, vol. 12(1), pages 85-99, 02.
- Van den Berg, Gerard J., 2000.
"Duration Models: Specification, Identification, and Multiple Durations,"
9446, University Library of Munich, Germany.
- Van den Berg, Gerard J., 2001. "Duration models: specification, identification and multiple durations," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 55, pages 3381-3460 Elsevier.
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