Education and Risk Compensation in Wages: A Quantile Regression Approach

Arbeitspapier

This paper examines the effect of wage variation on individual wages. The results reveal that wage variation by educational classifications positively affects wages, while the skewness has a negative effect. As has been referred in previous literature on the issue, both results are consistent with the notion of wage compensation for risk-averse workers. However, our results show that the impact of wage-variation on wages is not reasonably described by a single parameter for all individuals. Such an effect is heterogeneous and varies throughout the conditional wage distribution. Indeed, the positive effect of dispersion increases, and the negative effect of skewness decreases, as we move up on the conditional wage distribution. Apparently, those at the upper end of the conditional wage distribution have both higher risk-aversion and higher affection for skewness.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 12237

Classification and Topics

• Classification: Wirtschaft ; Wage Level and Structure; Wage Differentials ; Compensation Packages; Payment Methods
• Subject: risk compensation ; education ; wage formation ; quantile regression

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Vieira, José António Cabral ; Constância, Carolina ; Teixeira, João
• Event: Veröffentlichung
• (who): Institute of Labor Economics (IZA)
• (where): Bonn
• (when): 2019

Further information

• Handle: http://hdl.handle.net/10419/196735
• Last update: 10.03.2025, 11:45 AM CET