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Risk Aversion and Sorting into Public Sector Employment

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  • Pfeifer, Christian

    () (Leuphana University Lüneburg)

Abstract

This research note uses two German data sets – the large-scale German Socio-Economic Panel and unique data from own student questionnaires – to analyse the relationship between risk aversion and the choice for public sector employment. Main results are: (1) more risk averse individuals sort into public sector employment, (2) the impact of career specific and unemployment risk attitudes is larger than the impact of general risk attitudes, and (3) risk taking is rewarded with higher wages in the private but not in the public sector.

Suggested Citation

  • Pfeifer, Christian, 2008. "Risk Aversion and Sorting into Public Sector Employment," IZA Discussion Papers 3503, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp3503
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    More about this item

    Keywords

    wage differentials; public sector; risk aversion; sorting;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets

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