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The link between career risk aversion and unemployment duration: Evidence of nonlinear and time-depending pattern

Author

Listed:
  • Dirk Oberschachtsiek

    () (Wissenschaftszentrum Berlin für Sozialforschung and Institute of Economics, Leuphana University of Lüneburg, Germany)

  • Britta Ullrich

    () (Institute of Economics, Leuphana University of Lüneburg, Germany)

Abstract

In this study, we investigate the nexus between career risk aversion and unemployment duration based on German survey data (GSOEP). Using a direct measurement of career risk aversion, we do not find a statistically significant linear effect from risk aversion on unemployment duration. However, we find significant effects when controlling for a non-linear or time varying correlation between risk aversion and unemployment duration. Our results show that risk aversion is important when deciding when to leave unemployment. This research takes into account the high complexity involved in how risk aversion enters an individual’s decision process during a job search.

Suggested Citation

  • Dirk Oberschachtsiek & Britta Ullrich, 2010. "The link between career risk aversion and unemployment duration: Evidence of nonlinear and time-depending pattern," Working Paper Series in Economics 189, University of Lüneburg, Institute of Economics.
  • Handle: RePEc:lue:wpaper:189
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    File URL: https://www.leuphana.de/fileadmin/user_upload/Forschungseinrichtungen/ifvwl/WorkingPapers/lue/pdf/wp_189_Upload.pdf
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    References listed on IDEAS

    as
    1. Christian Pfeifer, 2011. "Risk Aversion and Sorting into Public Sector Employment," German Economic Review, Verein für Socialpolitik, vol. 12(1), pages 85-99, February.
    2. Van den Berg, Gerard J., 2001. "Duration models: specification, identification and multiple durations," Handbook of Econometrics,in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 55, pages 3381-3460 Elsevier.
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    Cited by:

    1. Caliendo, Marco & Künn, Steffen & Weißenberger, Martin, 2016. "Personality traits and the evaluation of start-up subsidies," European Economic Review, Elsevier, vol. 86(C), pages 87-108.

    More about this item

    Keywords

    unemployment; risk aversion; duration model;

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies

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