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Compensating Wage Differentials for Schooling Risk in Denmark *
Author(s) -
DiazSerrano Luis,
Hartog Joop,
Nielsen Helena Skyt
Publication year - 2008
Publication title -
the scandinavian journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.725
H-Index - 64
eISSN - 1467-9442
pISSN - 0347-0520
DOI - 10.1111/j.1467-9442.2008.00558.x
Subject(s) - danish , economics , earnings , wage , skewness , risk compensation , robustness (evolution) , labour economics , demographic economics , econometrics , medicine , philosophy , linguistics , biochemistry , chemistry , accounting , family medicine , human immunodeficiency virus (hiv) , gene
In this paper we analyse the association between wage differentials and risk using detailed information on length and type of education as seen in Danish administrative registers. Our contribution to the literature is that we distinguish between transitory (time‐series) and permanent (cross‐sectional) income shocks, and estimate the compensation for both sorts of risk. We find that wage risk in a given education cell is associated with higher wages, while skewness is associated with lower wages. As a robustness check, we see that ad hoc risk measures based on earnings‐mobility indicators confirm these findings.