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 InfoPaper provided by Department of Economics, Finance and Accounting, National University of Ireland - Maynooth in its series Economics, Finance and Accounting Department Working Paper Series with number n1370804.
Length: 33 pages
Date of creation: Aug 2004
Date of revision:
earnings risk; schooling decisions;
Other versions of this item:
- Joop Hartog & Luis Díaz-Serrano, 2007. "Earnings risk and demand for higher education: A cross-section test for Spain," Journal of Applied Economics, Universidad del CEMA, vol. 0, pages 1-28, May.
- 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).
- I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
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