IDEAS home Printed from https://ideas.repec.org/a/bpj/bejeap/vadvances.5y2005i1n7.html
   My bibliography  Save this article

Risk and Career Choice

Author

Listed:
  • Saks Raven E

    (Harvard University, raven.e.saks@frb.gov)

  • Shore Stephen H

    (University of Pennsylvania, shore@jhu.edu)

Abstract

Choosing a type of education is one of the largest financial decisions we make. Educational investment differs from other types of investment in that it is indivisible and non-tradable. These differences lead agents to demand a premium to enter careers with more idiosyncratic risk. Since the required premium will be smaller for wealthier agents, they will tend to enter careers with more idiosyncratic risk.After developing a model of career choice, we use data from the Panel Study of Income Dynamics (PSID) to estimate the risk associated with different careers. We find education, health care, and engineering careers to have relatively safe streams of labor income; business, sales, and entertainment careers are more risky.By choosing a college major, many students make a costly human capital investment that allows them to enter a specific career. To examine the link between wealth and college major choice implied by the model, we use data on choice of college major from the National Postsecondary Student Aid Survey (NPSAS). Controlling for observable measures of ability and background, we find evidence that wealthier students tend to choose riskier careers, particularly business.

Suggested Citation

  • Saks Raven E & Shore Stephen H, 2005. "Risk and Career Choice," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(1), pages 1-45, October.
    • Handle: RePEc:bpj:bejeap:v:advances.5:y:2005:i:1:n:7
    DOI: 10.1515/1538-0637.1414
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/1538-0637.1414
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.1515/1538-0637.1414?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Panel on Estimates of Poverty for Small Geographic Areas of which Allen L. Schirm is a member, "undated". "Small-Area Income and Poverty Estimates: Priorities for 2000 and Beyond," Mathematica Policy Research Reports a0588a6815864c46b8974e1d1, Mathematica Policy Research.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dustmann Christian & Preston Ian P, 2007. "Racial and Economic Factors in Attitudes to Immigration," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 7(1), pages 1-41, November.
    2. Venables Anthony J. & Rice Patricia G. & Stewart Martin, 2003. "The Geography of Intra-Industry Trade: empirics," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 3(1), pages 1-25, September.
    3. Anderberg Dan & Perroni Carlo, 2003. "Time-Consistent Policy and Politics: Does Voting Matter When Individuals Are Identical?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 3(1), pages 1-19, March.
    4. Loranth Gyongyi & Sciubba Emanuela, 2006. "Relative Performance, Risk and Entry in the Mutual Fund Industry," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 6(1), pages 1-28, September.
    5. Lange Ian & Bellas Allen S, 2007. "The 1990 Clean Air Act and the Implicit Price of Sulfur in Coal," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 7(1), pages 1-25, August.
    6. Helpman Elhanan & Persson Torsten, 2001. "Lobbying and Legislative Bargaining," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 1(1), pages 1-33, November.
    7. Villas-Boas, Sofia B & Kiesel, Kristin, 2007. "Got Organic Milk? Consumer Valuations of Milk Labels after the Implementation o f the USDA Organic Seal," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt5593m46q, Department of Agricultural & Resource Economics, UC Berkeley.
    8. Kiesel Kristin & Villas-Boas Sofia B, 2007. "Got Organic Milk? Consumer Valuations of Milk Labels after the Implementation of the USDA Organic Seal," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 5(1), pages 1-40, April.
    9. Pierce John D & Reinbold Kirk A & Lyngard Barry C & Goldman Robert J & Pastore Christopher M, 2006. "Direct Measurement of Punch Force During Six Professional Boxing Matches," Journal of Quantitative Analysis in Sports, De Gruyter, vol. 2(2), pages 1-19, April.
    10. Pence Karen M., 2006. "The Role of Wealth Transformations: An Application to Estimating the Effect of Tax Incentives on Saving," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(1), pages 1-26.
    11. Bureau Jean-Christophe & Salvatici Luca, 2004. "WTO Negotiations on Market Access in Agriculture: a Comparison of Alternative Tariff Cut Proposals for the EU and the US," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 4(1), pages 1-35, March.
    12. McAusland Carol, 2003. "Environmental Regulation as Export Promotion: Product Standards for Dirty Intermediate Goods," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 3(2), pages 1-19, December.
    13. Ben-Shahar Danny & Jacob Assaf, 2004. "Selective Enforcement of Copyright as an Optimal Monopolistic Behavior," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 3(1), pages 1-29, September.
    14. Fairlie Robert W, 2004. "Race and the Digital Divide," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 3(1), pages 1-38, September.
    15. Ferrari Dr. Alessandra, 2005. "The Payment of Hospital Services: a Waiting Lists Model," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(1), pages 1-19, September.
    16. Sharma Basu & Gani Azmat, 2004. "The Effects of Foreign Direct Investment on Human Development," Global Economy Journal, De Gruyter, vol. 4(2), pages 1-20, December.
    17. Borrmann Jörg, 2004. "Franchise Bidding for Postal Services in Rural Regions," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 4(1), pages 1-22, April.
    18. Mulligan Casey B & Sala-i-Martin Xavier, 2004. "Political and Economic Forces Sustaining Social Security," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 4(1), pages 1-56, May.
    19. Hultberg Patrik T & Barbier Edward B, 2003. "Cross-Country Policy Harmonization with Rent-Seeking," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 3(2), pages 1-22, December.
    20. Kinoshita, Hiroki & Kobayashi, Yasuki & Fukuda, Takashi, 2008. "Duplicative medications in patients who visit multiple medical institutions among the insured of a corporate health insurance society in Japan," Health Policy, Elsevier, vol. 85(1), pages 114-123, January.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:bejeap:v:advances.5:y:2005:i:1:n:7. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.