Earnings risk and demand for higher education: A cross-section test for Spain
Joop Hartog and
Luis DÃaz-Serrano ()
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Luis DÃaz-Serrano: Universitat Rovira i Virgili, CREB and IZA, http://www.iza.org/index_html?lang=en&mainframe=http%3A//www.iza.org/en/webcontent/personnel/photos/index_html%3Fkey%3D1523&topSelect=personnel&subSelect=fellows
Authors registered in the RePEc Author Service: Luis Diaz-Serrano ()
Journal of Applied Economics, 2007, vol. 10, 1-28
We develop a simple human capital model for optimum schooling length when earnings are stochastic, and highlight the pivotal role of risk attitudes and the schooling gradient of earnings risk. We use Spanish data to document the gradient and to estimate individual response to earnings risk in deciding on attending university education, by measuring risk as the residual variance in regional earnings functions. We find that the basic response is negative but that in households with lower risk aversion, the response will be dampened substantially and may even be reversed to positive.
Keywords: earnings risk; schooling decisions (search for similar items in EconPapers)
JEL-codes: I21 (search for similar items in EconPapers)
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Working Paper: EARNINGS RISK AND DEMAND FOR HIGHER EDUCATION: A CROSS-SECTION TEST FOR SPAIN (2004)
Working Paper: Earnings Risk and Demand for Higher Education: A Cross-Section Test for Spain (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:cem:jaecon:v:10:y:2007:n:1:p:1-28
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