Risk Aversion and Job Mobility

Abstract

Job mobility is inherently risky as workers have limited ex ante information about the quality of outside jobs. Using a large longitudinal Dutch dataset, which includes data on risk preferences elicited through an (incentivized) lottery-choice experiment, we examine the relation between risk aversion and job mobility. The evidence shows that risk averse workers are less likely to move to other jobs. The results are stronger for male workers and for workers who hold a permanent contract. Our empirical findings indicate that the negative relation between risk aversion and job mobility is driven by the job acceptance rather than the search effort decision.