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Is There a Risk-Return Trade-Off across Occupations? Evidence from Spain

26 Pages Posted: 22 Oct 2004  

Luís Díaz-Serrano

National University of Ireland, Maynooth; IZA Institute of Labor Economics

Joop Hartog

University of Amsterdam - Faculty of Economics and Business (FEB); Tinbergen Institute; CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

Date Written: October 2004

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.

Keywords: risk-aversion, skewness affection, occupational choices, compensating wage differentials

JEL Classification: J3, D8

Suggested Citation

Díaz-Serrano, Luís and Hartog, Joop, Is There a Risk-Return Trade-Off across Occupations? Evidence from Spain (October 2004). IZA Discussion Paper No. 1355. Available at SSRN: https://ssrn.com/abstract=609061

Luís Díaz-Serrano (Contact Author)

National University of Ireland, Maynooth ( email )

2nd Floor
Iontas Building
Maynooth, County Kildare
Ireland

IZA Institute of Labor Economics

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

Joop Hartog

University of Amsterdam - Faculty of Economics and Business (FEB) ( email )

Roetersstraat 11
Amsterdam, 1018 WB
Netherlands

Tinbergen Institute

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

IZA Institute of Labor Economics

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

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