Risk Preference and Employment Contract Type

Abstract

Summary We explore the possibility that a systematic relationship exists between employment within a particular type of contract and risk preference. We exploit a set of proxies for risk preference, whereby some of the proxies capture risk loving behaviour (expenditure on gambling, smoking and alcohol) whereas others capture risk averse behaviour (expenditure on life and contents insurance, and unearned income). The empirical analysis, based on pooled cross-section data from the UK Family Expenditure Survey, 1997–2000, provides evidence of a systematic relationship between employment contract type and risk preference, with, for example, self-employed workers being more or less likely to engage in the consumption of ‘risky’ or financial security products respectively. The results are based on the ordered generalized extreme value model, a relatively infrequently used discrete choice model, which allows for ordering and correlation in the alternatives observed.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 52 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.