Why Do We Ignore the Risk in Schooling Decisions?

Joop Hartog () and Luis Diaz-Serrano ()
Additional contact information
Joop Hartog: University of Amsterdam

No 8110, IZA Discussion Papers from Institute of Labor Economics (IZA)

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: labour supply; human capital; risk; schooling (search for similar items in EconPapers)
JEL-codes: I21 J22 J24 J31 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2014-04
New Economics Papers: this item is included in nep-edu, nep-hrm, nep-lab and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published - published in: De Economist, 2015, 163, 125-153

Downloads: (external link)
https://docs.iza.org/dp8110.pdf (application/pdf)

Related works:
Working Paper: Why Do We Ignore the Risk in Schooling Decisions? (2014)
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:iza:izadps:dp8110

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().