Are public sector workers more risk averse than private sector workers?

UNCG Author/Contributor (non-UNCG co-authors, if there are any, appear on document)
Albert N. Link, Professor (Creator)
The University of North Carolina at Greensboro (UNCG )
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Abstract: Available evidence suggests that stability of employment is greater in the public sector than in the private sector. The value that individuals place on tbis stability depends on tbe individual's degree of risk aversion. Economic reasoning suggests tbat, otber tbings equal, tbose individuals witb a high degree of aversion to risk will be more likely tban otbers to seek employment in the public sector. This paper tests tbat hypothesis tbrougb tbe use of probit analysis and a measure of risk aversion developed in ibe University of Micbigan's Panel Study of Income Dynamics. The results tend to confirm tbe bypotbesis, implying tbat a policy of intersectoral equality of pay for comparable jobs would result inanexcesssupplyof workers to tbe public sector.

Additional Information

Language: English
Date: 1981
risk aversion, labor relations, employment stability, private sector, public sector, economics, economic theory

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