Conformists or rebels? Relative risk aversion, educational decisions and social class reproduction

Mads M. Jæger and Anders Holm ()

Rationality and Society, 2012, vol. 24, issue 2, 221-253

Abstract: This paper tests the theory of Relative Risk Aversion (RRA), which argues that educational decisions are intended to minimize the risk of downward social class mobility. We propose a structural model which distinguishes the instantaneous utility of educational decisions from the future utility of these decisions with respect to reproducing one’s parents’ social class position. We analyse British data and find that RRA accounts for some of the observed social class differences in educational decisions. We also find that while more than 90% of individuals derive utility from reproducing their parents’ social class position (RRA ‘conformists’), a small group of individuals experience disutility from reaching their parents’ social class position (RRA ‘rebels’). Individuals who experience disutility from reproducing their parents’ social class position are characterized by low cognitive ability and a high incidence of behavioural problems in childhood.

Keywords: Educational decision making; rational choice; relative risk aversion; structural model; United Kingdom (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:ratsoc:v:24:y:2012:i:2:p:221-253

DOI: 10.1177/1043463112441346

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