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Risk aversion and job mobility

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  • van Huizen, Thomas
  • Alessie, Rob

Abstract

Job mobility is inherently risky as workers have limited ex ante information about the quality of outside jobs. Using a large longitudinal Dutch dataset, which includes data on risk preferences elicited through an (incentivized) lottery-choice experiment, we examine the relation between risk aversion and job mobility. The evidence shows that risk averse workers are less likely to move to other jobs. The results are stronger for male workers and for workers who hold a permanent contract. Our empirical findings indicate that the negative relation between risk aversion and job mobility is driven by the job acceptance rather than the search effort decision.

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  • van Huizen, Thomas & Alessie, Rob, 2019. "Risk aversion and job mobility," Journal of Economic Behavior & Organization, Elsevier, vol. 164(C), pages 91-106.
    • Handle: RePEc:eee:jeborg:v:164:y:2019:i:c:p:91-106
    DOI: 10.1016/j.jebo.2019.01.021
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    More about this item

    Keywords

    Job mobility; Risk aversion; Job search; Risk preferences;
    All these keywords.

    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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