Paolo Buonanno
Dario Pozzoli
We investigate whether individual attitudes toward risk may
explain why, though there exist huge dierences in the employment
returns of graduates by elds of study, the most demanded subjects
by the economy are less frequently chosen. The econometric
methodology is based on a three step procedure which controls for
selectivity bias in the first stage (Heckman, 1979; Lee, 1983;
Trost and Lee, 1984). Using a large data set from a survey on the
2001 Italian high school graduates, the main results indicate
that students take into account the a priori probability of
unsuccess when choosing the college subject. Moreover, students
coming from a lower socio-economic background display more risk
aversion.
Keywords: Risk aversion, College subject, Self-selection
JEL: C34 J24 I21
Date: 2007-11
URL: http://d.repec.org/n?u=RePEc:brg:wpaper:0707&r=edu
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