Why do we ignore the risk in schooling decisions?

Joop Hartog () and Luis Diaz Serrano ()
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Joop Hartog: Universiteit van Amsterdam
Luis Diaz Serrano: Universitat Rovira et Virgili

Chapter 03 in Investigaciones de Economía de la Educación, 2014, vol. 9, pp 91-116 from Asociación de Economía de la Educación

Abstract: While uncertainty abounds in almost any decision on investment in schooling, it is mostly ignored in research and virtually absent in labour economics text books. This paper documents the scope for risk, discusses the tough disentanglement of heterogeneity and risk, surveys the analytical models, laments the absence of a good workhorse model and points out the challenges worth tackling: document ex ante risk that investors face, develop a tractable and malleable analytical model and integrate the option of consumption smoothing in analytical and empirical work. Hedging labour market risk in the stock market can be safely ignored.

Keywords: schooling; risk; human capital; labour supply (search for similar items in EconPapers)
JEL-codes: I21 J22 J24 J31 (search for similar items in EconPapers)
Date: 2014
ISBN: 978-84-942418-8-8
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