EconPapers    
Economics at your fingertips  
 

Is Investing in College Education Risky?

Stacey Chen ()

Discussion Papers from University at Albany, SUNY, Department of Economics

Abstract: Attending college seems to be a profitable and affordable investment in the US. Nevertheless, a number of academically talented young people still hesitate to attend college. This puzzle motivates this paper to test for whether college education is a risky investment. To measure the riskiness of college attendance, I estimate the risk differential in earnings between college attendees and high school graduates. This paper copes with selection bias problems and distinguishes permanent earnings risk from transitory earnings risks. Evidence indicates that investing in a four-year college education is indeed risky, suggesting that, under certain circumstances, the riskiness of college attendance is an important factor in the schooling choice.

Keywords: Schooling; Risk Differential; Risk Premium; Selection Bias. (search for similar items in EconPapers)
JEL-codes: D81 C25 I2 (search for similar items in EconPapers)
Date: 2001
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10) Track citations by RSS feed

Downloads: (external link)
http://www.albany.edu/economics/research/workingp/2001/Risky.pdf (application/pdf)

Related works:
Working Paper: Is Investing College Education Risky? (2002) Downloads
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:nya:albaec:01-09

Ordering information: This working paper can be ordered from
Department of Economics, Building 25, Room 103 University at Albany State University of New York Albany, NY 12222 U.S.A.
http://www.albany.ed ... workingp/index.shtml

Access Statistics for this paper

More papers in Discussion Papers from University at Albany, SUNY, Department of Economics Department of Economics, Building 25, Room 103 University at Albany State University of New York Albany, NY 12222 U.S.A..
Bibliographic data for series maintained by Byoung Park ().

 
Page updated 2020-07-03
Handle: RePEc:nya:albaec:01-09