Why Do We Ignore the Risk in Schooling Decisions?

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

No 8110, IZA Discussion Papers from IZA Network @ LISER

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

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

Related works:
Working Paper: Why Do We Ignore the Risk in Schooling Decisions? (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp8110

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