The Relationship between Unemployment and Risk-Aversion
In this paper we use a direct measure of individual risk-aversion to examine the relationship between risk-aversion and unemployment. The traditional search model predicts that more risk-averse individuals have lower reservation wages and thus are less likely to be observed in unemployment. Our findings, however, do not support this prediction: on the contrary our data suggest that more risk-averse individuals are more likely to be unemployed.
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- Guiso, Luigi & Paiella, Monica, 2001.
"Risk Aversion, Wealth and Background Risk,"
CEPR Discussion Papers
2728, C.E.P.R. Discussion Papers.
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