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Is there a Risk-Return Trade-off across Occupations? Evidence from Spain

Author

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  • Luis Diaz-Serrano

    (National University of Ireland, Maynooth, IZA, Bonn, CREB, Universitat de Barcelona)

  • J. Hartog

    (Universiteit van Amsterdam)

Abstract

We use data from Spain to test for an effect of earnings risk and skewness on individual wages. We carry out separate estimation for men, women, public and private sector employees. In accordance with previous evidence for the US we show the existence of a risk-return trade-off across occupations in the Spanish labour market. These results are in conformity with preferences of risk-averse individuals with decreasing absolute risk aversion.

Suggested Citation

  • Luis Diaz-Serrano & J. Hartog, 2004. "Is there a Risk-Return Trade-off across Occupations? Evidence from Spain," Economics Department Working Paper Series n1441004, Department of Economics, National University of Ireland - Maynooth.
    • Handle: RePEc:may:mayecw:n1441004
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    File URL: http://repec.maynoothuniversity.ie/mayecw-files/N1441004.pdf
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    References listed on IDEAS

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    2. Joop Hartog & Luis Díaz-Serrano, 2007. "Earnings risk and demand for higher education: A cross-section test for Spain," Journal of Applied Economics, Universidad del CEMA, vol. 10, pages 1-28, May.
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    Cited by:

    1. Shelest Olena, 2015. "Risk of Investments in Human Capital and Expected Worker Mobility," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 47(1), pages 82-106, September.

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    More about this item

    Keywords

    Risk-aversion; skewness affection; occupational choices; compensating wage differentials;
    All these keywords.

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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