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Why do we ignore risk in schooling decisions?

Author

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  • Hartog, Joop
  • Díaz Serrano, Lluís

Abstract

While uncertainty abounds in almost any decision on investment in schooling, it is mostly ignored in research and virtually absent in labour economics tekst books. This paper documents the scope for risk, discusses the tough disentanglement of heterogeneity and risk, surveys the analytical models, laments the absence of a good workhorse model and points out the challenges worth tackling: document ex ante risk that investors face, develop a tractable and malleable analytical model and integrate the option of consumption smoothing in analytical and empirical work. Hedging labour market risk in the stock market can be safely ignored.

Suggested Citation

  • Hartog, Joop & Díaz Serrano, Lluís, 2014. "Why do we ignore risk in schooling decisions?," Working Papers 2072/237594, Universitat Rovira i Virgili, Department of Economics.
    • Handle: RePEc:urv:wpaper:2072/237594
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    File URL: http://hdl.handle.net/2072/237594
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    References listed on IDEAS

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    1. Jeff Dominitz & Charles F. Manski, 1996. "Eliciting Student Expectations of the Returns to Schooling," Journal of Human Resources, University of Wisconsin Press, vol. 31(1), pages 1-26.
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    Cited by:

    1. Shelest Olena, 2015. "Risk of Investments in Human Capital and Expected Worker Mobility," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 47(1), pages 82-106, September.

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