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Intergenerational transmission of risk attitudes – A revealed preference approach

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  • Necker, Sarah
  • Voskort, Andrea

Abstract

This study investigates whether children and parents show a similar willingness to take risk in their choice of occupation. Using data from the German Socio-Economic Panel, we calculate the occupational variation in earnings unexplained by human capital differences to obtain a measure of occupational risk. We find that fathers' earnings risk is significantly positively related to sons' earnings risk. The same link is found when unemployment risk is considered. However, a conclusion indicated by previous studies based on self-reports of individuals' risk attitude as well as our findings is that intergenerational transmission is weak in terms of effect size.

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  • Necker, Sarah & Voskort, Andrea, 2014. "Intergenerational transmission of risk attitudes – A revealed preference approach," European Economic Review, Elsevier, vol. 65(C), pages 66-89.
    • Handle: RePEc:eee:eecrev:v:65:y:2014:i:c:p:66-89
    DOI: 10.1016/j.euroecorev.2013.10.005
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    Cited by:

    1. Necker, Sarah & Voskort, Andrea, 2014. "Politics and parents — Intergenerational transmission of values after a regime shift," European Journal of Political Economy, Elsevier, vol. 36(C), pages 177-194.
    2. Fossen, Frank M. & Glocker, Daniela, 2017. "Stated and revealed heterogeneous risk preferences in educational choice," European Economic Review, Elsevier, vol. 97(C), pages 1-25.
    3. Philipp Huebler & Andreas Kucher, 2016. "Ashes to ashes, time to time - Parental time discounting and its role in the intergenerational transmission of smoking," Discussion Paper Series 326, Universitaet Augsburg, Institute for Economics.
    4. José García-Montalvo & Marta Reynal-Querol, 2020. "Colonization, Early Settlers and Development: The Case of Latin America," Working Papers 1189, Barcelona Graduate School of Economics.
    5. Andreas Kuhn & Stefan C. Wolter, 2018. "The Strength of Gender Norms and Gender-Stereotypical Occupational Aspirations Among Adolescents," Economics of Education Working Paper Series 0151, University of Zurich, Department of Business Administration (IBW).
    6. Vanessa Hartlaub & Thorsten Schneider, 2012. "Educational Choice and Risk Aversion: How Important Is Structural vs. Individual Risk Aversion?," SOEPpapers on Multidisciplinary Panel Data Research 433, DIW Berlin, The German Socio-Economic Panel (SOEP).
    7. Gianluca Femminis, 2019. "Risk aversion heterogeneity and the investment–uncertainty relationship," Journal of Economics, Springer, vol. 127(3), pages 223-264, August.
    8. Bodo Knoll & Nadine Riedel & Eva Schlenker, 2017. "He's a Chip Off the Old Block — The Persistence of Occupational Choices Across Generations," LABOUR, CEIS, vol. 31(2), pages 174-203, June.
    9. François-Charles Wolff, 2020. "The intergenerational transmission of risk attitudes: Evidence from Burkina Faso," Review of Economics of the Household, Springer, vol. 18(1), pages 181-206, March.
    10. Heinrich, Timo & Shachat, Jason, 2018. "The development of risk aversion and prudence in Chinese children and adolescents," MPRA Paper 86456, University Library of Munich, Germany.
    11. Martin Binder, 2020. "(Home-)Schools of Democracy? On the Intergenerational Transmission of Civic Engagement," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 149(3), pages 911-945, June.
    12. Vieider, Ferdinand M. & Chmura, Thorsten & Martinsson, Peter, 2012. "Risk attitudes, development, and growth: Macroeconomic evidence from experiments in 30 countries," Discussion Papers, WZB Junior Research Group Risk and Development SP II 2012-401, WZB Berlin Social Science Center.
    13. Gonzalo Olcina & Elena Mas Tur & Luisa Escriche, 2017. "Entrepreneurs, culture and productivity," Discussion Papers in Economic Behaviour 0117, University of Valencia, ERI-CES.
    14. Argaw, Bethlehem A. & Maier, Michael F. & Skriabikova, Olga J., 2017. "Risk attitudes, job mobility and subsequent wage growth during the early career," ZEW Discussion Papers 17-023, ZEW - Leibniz Centre for European Economic Research.
    15. Aina, Carmen & Nicoletti, Cheti, 2018. "The intergenerational transmission of liberal professions," Labour Economics, Elsevier, vol. 51(C), pages 108-120.
    16. Ferdinand M. Vieider & Mathieu Lefebvre & Ranoua Bouchouicha & Thorsten Chmura & Rustamdjan Hakimov & Michal Krawczyk & Peter Martinsson, 2015. "Common Components Of Risk And Uncertainty Attitudes Across Contexts And Domains: Evidence From 30 Countries," Journal of the European Economic Association, European Economic Association, vol. 13(3), pages 421-452, June.
    17. J. Ignacio Gimenez-Nadal & José Alberto Molina & Yu Zhu, 2018. "Intergenerational mobility of housework time in the United Kingdom," Review of Economics of the Household, Springer, vol. 16(4), pages 911-937, December.
    18. José Garcia Montalvo & Marta Reynal-Querol, 2020. "Colonization, early settlers and development: The case of Latin America," Economics Working Papers 1729, Department of Economics and Business, Universitat Pompeu Fabra.

    More about this item

    Keywords

    Risk preferences; Intergenerational transmission; Occupational choice;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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