How does risk affect saving? Empirical work typically examines the effects of detectible differences in risk within the … data. How these differences affect saving in theoretical models depends on the metric one uses for risk. For labor …-income risk, second-degree increases in risk require prudence to induce increased saving demand. However, prudence is not …

parametric and non-parametric measures to capture expected wage risk. These wage risk measures are unfettered by heterogeneity … which handicapped the use of actual market wage dispersion as risk measure in earlier studies. Students in our sample … anticipate that the market provides compensation for risk, as has been established with Risk Augmented Mincer earnings equations …

variance of exam grades is higher and that starting wages are lower if the skew is higher: employers shift quality risk to new …

model with idiosyncratic labor income risk. In our model economy, even a moderate earnings testing reduces individuals …

uncertainty ; wage shocks ; risk sharing ; wage insurance …

In this model of education, where individuals are exposed both to educational risk and to wage risk within the skilled … present risks is a dichotomic task: Wage risk is diversified ex post among the skilled by graduate taxation and skill …-specific tuition fees. Educational risk of failure and inequality between skilled and unskilled workers are mitigated ex ante by …