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Educational Attainment and Risk Preference

Brown, S., Ortiz, A. and Taylor, K. (2006) Educational Attainment and Risk Preference. Working Paper. Department of Economics, University of Sheffield ISSN 1749-8368

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Abstract

We explore the relationship between risk preference and educational attainment for a sample of adults drawn from the 1996 U.S. Panel Study of Income Dynamics (PSID). Using a sequence of questions from the 1996 PSID, we construct measures of an individual´s risk aversion and risk tolerance allowing us to explore the implications of interpersonal differences in risk preference for educational attainment. Our empirical findings suggest that an individual´s degree of risk aversion (tolerance) is inversely (positively) associated with their educational attainment. In addition, using the 1997 and 2002 Child Development Supplements of the PSID, we explore the relationship between the risk preference of parents and the academic achievements of their children. Our findings suggest that a parent´s degree of risk aversion (tolerance) is negatively (positively) related to the academic achievements of their children.

Item Type: Monograph (Working Paper)
Copyright, Publisher and Additional Information: The Sheffield Economics Research Paper (SERP) series offers a forum for the research output of the academic staff and research students of the Department of Economics, University of Sheffield. Papers are reviewed for quality and presentation by a departmental editor. However, the contents and opinions expressed remain the responsibility of the authors. All papers may be downloaded free on the understanding that the contents are preliminary and therefore permission from the author(s) should be sought before they are referenced.
Keywords: Human Capital, Risk Aversion, Risk Preference, Wages
Institution: The University of Sheffield
Academic Units: The University of Sheffield > Faculty of Social Sciences (Sheffield) > Department of Economics (Sheffield) > Sheffield Economics Research Papers Series
Depositing User: Repository Officer
Date Deposited: 20 Oct 2009 15:03
Last Modified: 17 Jun 2014 15:50
Published Version: http://www.shef.ac.uk/economics/research/serps/yea...
Status: Published
Publisher: Department of Economics, University of Sheffield
Identification Number: Sheffield Economic Research Paper Series 2006002
URI: http://eprints.whiterose.ac.uk/id/eprint/9938

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