Childhood Determinants of Risk Aversion: The Long Shadow of Compulsory Education

Sørensen, Bent E, Maria Luengo-Prado and Dmytro Hryshko ()
Authors registered in the RePEc Author Service: Bent E. Sorensen

No 7999, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We study the determinants of individual attitudes towards risk and, in particular, why some individuals exhibit extremely high risk aversion. Using data from the Panel Study of Income Dynamics we find that a policy induced increase in high school graduation rates leads to significantly fewer individuals being highly risk averse in the next generation. Other significant determinants of risk aversion are age, sex, and parents' risk aversion. We verify that risk aversion matters for economic behavior in that it predicts individuals' volatility of income.

Keywords: High school movement; Intergenerational transmission (search for similar items in EconPapers)
JEL-codes: E21 I29 (search for similar items in EconPapers)
Date: 2010-09
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Citations: View citations in EconPapers (6)

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Related works:
Journal Article: Childhood determinants of risk aversion: The long shadow of compulsory education (2011)
Working Paper: Childhood Determinants of Risk Aversion: The Long Shadow of Compulsory Education (2011)
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