Attitudes Towards Large Income Risk in Welfare States: An International Comparison
Fred Schroyen and
Karl Ove Aarbu
Economica, 2018, vol. 85, issue 340, 846-872
Using survey data and the instrument developed by Barsky et al. (), we estimate the distribution of attitudes towards income risk in a country where many employment and health‐related risks are generously covered by a tax‐financed social insurance system (Norway in 2006). Under a constant relative risk aversion assumption, the sample average for the coefficient of relative risk aversion is 3.8 with standard deviation 2.3. This number is then contrasted to that for five other OECD countries where risk attitudes have been measured using the same instrument and also prior to the financial crisis: Chile, France, Italy, the Netherlands and the USA. When we relate this distribution for stated relative risk aversion to that for generosity of social insurance and the risks related to employment and health expenditure, a picture emerges suggesting that more extensive welfare states induce higher risk tolerance for foreground risks—a relationship that is in line with the theory on risk vulnerability.
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bla:econom:v:85:y:2018:i:340:p:846-872
Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0013-0427
Access Statistics for this article
Economica is currently edited by Frank Cowell, Tore Ellingsen and Alan Manning
More articles in Economica from London School of Economics and Political Science Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().