Compensating wage differentials for schooling risk in Denmark

Luis Diaz-Serrano*, Joop Hartog, Helena Skyt Nielsen

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

10 Citations (Scopus)


In this paper we analyse the association between wage differentials and risk using detailed information on length and type of education as seen in Danish administrative registers. Our contribution to the literature is that we distinguish between transitory (time-series) and permanent (cross-sectional) income shocks, and estimate the compensation for both sorts of risk. We find that wage risk in a given education cell is associated with higher wages, while skewness is associated with lower wages. As a robustness check, we see that ad hoc risk measures based on earnings-mobility indicators confirm these findings.
Original languageEnglish
Pages (from-to)711-731
Number of pages21
JournalScandinavian Journal of Economics
Issue number4
Publication statusPublished - Dec 2008
Externally publishedYes


  • Earnings shocks
  • Risk premium
  • Schooling risk
  • Skewness affection


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