Is There a Risk-Return Trade-Off across Occupations? Evidence from Spain
National University of Ireland, Maynooth; Institute for the Study of Labor (IZA)
University of Amsterdam - Faculty of Economics and Business (FEB); Tinbergen Institute; CESifo (Center for Economic Studies and Ifo Institute); Institute for the Study of Labor (IZA)
IZA Discussion Paper No. 1355
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.
Number of Pages in PDF File: 26
Keywords: risk-aversion, skewness affection, occupational choices, compensating wage differentials
JEL Classification: J3, D8
Date posted: October 22, 2004
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