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Title: Risk Preference, Time Preference and Occupational Choice

Citation Type: Miscellaneous

Publication Year: 2011

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Abstract: Given heterogeneous risk and time preferences of individuals, we investigate the impact of those preferences on sorting into occupations and industries using various measures of job risk. We construct three measures of risk across jobs, cross-categorized by occupation and industry: afatal injury rate, non-fatal injury and illness rate, and a measure of inter-person income variability. Using these measures, we analyze how risk and time preference of an individual affects his occupational choice. We find that there are different domains of risk and that individuals do not think of these in the same way. Using Health and Retirement Study data, we find behavioral inconsistency in health risks versus income risk. Based on our results, werecommend against using health-based risk proxies (e.g., smoking behavior) for financial risk analyses and vice versa.

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Authors: Beri, Meenakshi; Ward-Batts, Jennifer

Publisher: Wayne State University

Data Collections: IPUMS USA

Topics: Health, Labor Force and Occupational Structure, Other

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