Earnings Risk and Demand for Higher Education

Joop Hartog () and Luis Diaz Serrano ()
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Joop Hartog: Faculty of Economics and Econometrics, University of Amsterdam
Luis Diaz Serrano: University of Barcelona

No 02-122/3, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: We develop a simple human capital model for optimum schooling length when earnings are stochastic, and highlight the pivotal role of risk attitudes and the schooling gradient of earnings risk. We use Spanish data to document the gradient and to estimate individual response to earnings risk in deciding on attending university education, by measuring risk as the residual variance in regional earnings functions. We find that the basic response is negative but that in households with lower risk aversion, the response may be reversed to positive.

See also the publication in the Journal of Applied Economics , X(1), 1-28.

Keywords: Earnings Risk; Schooling Decisions (search for similar items in EconPapers)
JEL-codes: I21 (search for similar items in EconPapers)
Date: 2002-12-18
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:tin:wpaper:20020122

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