Risk preferences and occupational sorting: Combining survey and top-coded administrative wage data
Human capital and aging
Academic Paper
25 January 2012
We find that the risk aversion of individuals in a household survey (SOEP) is negatively correlated with the wage dispersion in their occupation, as estimated on an administrative wage data set (IABS). Due to top-coding of wages, a three-step censored quantile regressionapproach is used, while the estimation of occupation-level dispersion relies on the differences of group coefficient estimates at different quantiles.