Earnings Dispersion , Risk Aversion and Education

  title={Earnings Dispersion , Risk Aversion and Education},
  author={Christian Belzil and Joergen Hansen},
We estimate a dynamic programming model of schooling decisions in which the degree of risk aversion can be inferred from schooling decisions. In our model, individuals are heterogeneous with respect to school and market abilities but homogeneous with respect to the degree of risk aversion. We allow endogenous schooling attainments to affect the level of risk experienced in labor market earnings through wage dispersion and employment rate dispersion. We find a low degree of relative risk… CONTINUE READING


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