Relative Risk Aversion and Social Reproduction in Intergenerational Educational Attainment: Application of a Dynamic Discrete Choice Mode
The theory of Relative Risk Aversion (RRA) claims that educational decision-making is ultimately motivated by the individual’s desire to avoid downward social class mobility, and that this desire is stronger than the desire to pursue upward mobility. This paper implements a dynamic programming model which tests the central behavioral assumption in the RRA theory stating that (1) individuals are forward-looking when choosing education and (2) that the RRA mechanism comprises an important component in the educational decision-making process. Using data from the Danish Youth Longitudinal Study, we find strong evidence of RRA in educational decision-making over and above the effect of traditional social background variables.
|Date of creation:||Aug 2005|
|Date of revision:|
|Contact details of provider:|| Postal: Øster Farimagsgade 5, Building 26, DK-1353 Copenhagen K., Denmark|
Phone: (45) 35 32 30 74
Fax: +45 35 32 30 00
Web page: http://www.econ.ku.dk/CAM/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Daniel Houser & Michael Keane & Kevin McCabe, 2002.
"Behavior in a dynamic decision problem: An analysis of experimental evidence using a bayesian type classification algorithm,"
- Daniel Houser & Michael Keane & Kevin McCabe, 2004. "Behavior in a Dynamic Decision Problem: An Analysis of Experimental Evidence Using a Bayesian Type Classification Algorithm," Econometrica, Econometric Society, vol. 72(3), pages 781-822, 05.
- Taber, Christopher R., 2000. "Semiparametric identification and heterogeneity in discrete choice dynamic programming models," Journal of Econometrics, Elsevier, vol. 96(2), pages 201-229, June.
- Ira N. Gang & Thomas Bauer, 2000.
"Sibling Rivalry in Educational Attainment: The German Case,"
Departmental Working Papers
199909, Rutgers University, Department of Economics.
- Thomas Bauer & Ira Gang, 2001. "Sibling Rivalry in Educational Attainment: The German Case," LABOUR, CEIS, vol. 15(2), pages 237-255, 06.
- Bauer, Thomas K. & Gang, Ira N., 2000. "Sibling Rivalry in Educational Attainment: The German Case," IZA Discussion Papers 180, Institute for the Study of Labor (IZA).
- Arcidiacono, Peter, 2004.
"Ability sorting and the returns to college major,"
Journal of Econometrics,
Elsevier, vol. 121(1-2), pages 343-375.
- Charles T. Clotfelter & Michael Rothschild, 1993. "Studies of Supply and Demand in Higher Education," NBER Books, National Bureau of Economic Research, Inc, number clot93-1, 07.
- Eskil Heinesen & Richard Davies & Anders Holm, 2002. "The relative risk aversion hypothesis of educational choice," Journal of Population Economics, Springer;European Society for Population Economics, vol. 15(4), pages 683-713.
- Emer Smyth, 1999. "Educational Inequalities Among School Leavers in Ireland 1979-1994," The Economic and Social Review, Economic and Social Studies, vol. 30(3), pages 267-284.
When requesting a correction, please mention this item's handle: RePEc:kud:kuieca:2006_04. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Hoffmann)
If references are entirely missing, you can add them using this form.