EconPapers    
Economics at your fingertips  
 

Career Choice and the Risk Premium in the Labor Market

German Cubas () and Pedro Silos ()

Review of Economic Dynamics, 2017, vol. 26, 1-18

Abstract: We find a strong, robust, and positive correlation between average earnings and the standard deviation of both temporary and permanent idiosyncratic shocks to earnings across 19 US industries. Is this compensation for risk or for unobserved abilities? To answer this question we embed a Roy model into an incomplete markets equilibrium framework that features risk averse individuals who face industry-specific idiosyncratic shocks to their labor earnings. The interaction between earnings shocks and an individual's comparative advantage determines the optimal industry choice. (Copyright: Elsevier)

Keywords: Risk premium; Labor markets; Roy model; Incomplete markets (search for similar items in EconPapers)
JEL-codes: E21 D91 J31 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7) Track citations by RSS feed

Downloads: (external link)
http://dx.doi.org/10.1016/j.red.2017.02.009
Access to full texts is restricted to ScienceDirect subscribers and institutional members. See http://www.sciencedirect.com/ for details.

Related works:
Software Item: Code and data files for "Career Choice and the Risk Premium in the Labor Market" (2017) Downloads
Working Paper: CAREER CHOICE AND THE RISK PREMIUM IN THE LABOR MARKET (2015) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:red:issued:15-44

Ordering information: This journal article can be ordered from
https://www.economic ... ription-information/

DOI: 10.1016/j.red.2017.02.009

Access Statistics for this article

Review of Economic Dynamics is currently edited by Loukas Karabarbounis

More articles in Review of Economic Dynamics from Elsevier for the Society for Economic Dynamics Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().

 
Page updated 2021-05-14
Handle: RePEc:red:issued:15-44