Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/129739
Authors: 
Hetschko, Clemens
Preuss, Malte
Year of Publication: 
2015
Series/Report no.: 
SOEPpapers on Multidisciplinary Panel Data Research 813
Abstract: 
Using German panel data, we assess the causal effect of job loss, and thus of an extensive income shock, on risk attitude. In line with predictions of expected utility reasoning about absolute risk aversion, losing one's job reduces the willingness to take risks. This effect strengthens in previous hourly wage, begins to manifest itself as soon as an employee perceives the threat of job loss and is of a transitory nature. The change in stated risk attitude matches observable job finding behaviour, confirming the behavioural validity of our results.
Subjects: 
absolute risk aversion
income shock
job loss
plant closure
general risk attitude
JEL: 
D81
J64
J65
Document Type: 
Working Paper

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