Risk aversion and the teaching profession: an analysis including different forms of risk aversion, different control groups, selection and socialization effects

Abstract

Risk aversion might affect current and potential teachers’ reaction to reforms, such as payment reforms. However, evidence on teachers’ risk aversion in comparison to other occupations is limited. The present study is based on twelve waves of a representative German data set (N = 18,381) and shows that teaching relates positively to risk aversion, especially to risk aversion with respect to occupational career. Teachers score higher in risk aversion even than other civil servants. Our results suggest that risk-averse individuals are attracted to teaching, while we find no evidence for a socialization effect during the career.