Why do we ignore the risk in schooling decisions?

Joop Hartog*, Luis Diaz-Serrano

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

3 Citations (Scopus)

Abstract

While uncertainty abounds in almost any decision on investment in schooling, it is mostly ignored in research and virtually absent in labour economics text books. This paper documents the scope for risk, discusses the tough disentanglement of heterogeneity and risk, surveys the analytical models, laments the absence of a good workhorse model and points out the challenges worth tackling: document ex ante risk that investors face, develop a tractable and malleable analytical model and integrate the option of consumption smoothing in analytical and empirical work. Hedging labour market risk in the stock market can be safely ignored.
Original languageEnglish
Pages (from-to)125-153
Number of pages29
JournalEconomist (Netherlands)
Volume163
Issue number2
DOIs
Publication statusPublished - 1 Jun 2015
Externally publishedYes

Keywords

  • Education
  • Risk
  • Uncertainty

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