Time-Varying Individual Risk Attitudes Over the Great Recession: A Comparison of Germany and Ukraine

Quaderni - Working Paper DSE N° 1025

83 Pages Posted: 3 Sep 2015

See all articles by Thomas J. Dohmen

Thomas J. Dohmen

Institute for the Study of Labor (IZA); Maastricht University - Business Investment Research Center (BIRC)

Hartmut Lehmann

University of Bologna - School of Economics, Management, and Statistics; IZA Institute of Labor Economics

Norberto Pignatti

Tbilisi State University (TSU) - International School of Economics (ISET); IZA Institute of Labor Economics

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Date Written: September 3, 2015

Abstract

We use the panel data of the German Socio-Economic Panel (SOEP) and of the Ukrainian Longitudinal Monitoring Survey (ULMS) to investigate whether risk attitudes have primary (exogenous) determinants that are valid in different stages of economic development and in a different structural context, comparing a mature capitalist economy and a transition economy. We then analyze the stability of the risk measures over time. Between 2007 and 2012 we have the Great Recession, which had a mild impact in the German labor market while it had a more profound impact on the Ukrainian labor market. This enables us to investigate whether and how the crisis impacted on the risk attitudes in the two countries. By focusing on self-employment we also investigate whether the reduced willingness to take risks as a consequence of the Great Recession affects labor market dynamics and outcomes.

Keywords: Risk attitudes, Great Recession, time variation, labor market outcomes, Germany, Ukraine

JEL Classification: J64, J65, P50

Suggested Citation

Dohmen, Thomas and Lehmann, Hartmut F. and Pignatti, Norberto, Time-Varying Individual Risk Attitudes Over the Great Recession: A Comparison of Germany and Ukraine (September 3, 2015). Quaderni - Working Paper DSE N° 1025. Available at SSRN: https://ssrn.com/abstract=2655462 or http://dx.doi.org/10.2139/ssrn.2655462

Thomas Dohmen (Contact Author)

Institute for the Study of Labor (IZA) ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Maastricht University - Business Investment Research Center (BIRC) ( email )

P.O. Box 616
Maastricht, 6200 MD
Netherlands
+31-43-388 3832 (Phone)
+31-43-388 4856 (Fax)

Hartmut F. Lehmann

University of Bologna - School of Economics, Management, and Statistics ( email )

Piazza Scaravilli 1
40126 Bologna, fc 47100
Italy

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Norberto Pignatti

Tbilisi State University (TSU) - International School of Economics (ISET) ( email )

16 Zandukeli Street
Tbilisi, 0108
Georgia

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

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