Skip to main content

The relative risk aversion hypothesis of educational choice


Analysing young people's educational choices, we derive and test implications of a relative risk aversion hypothesis: that educational choices are made so as to minimize the risk of ending up with a lower level of education than one's parents. These implications are in general different from what one would expect from human capital theory. We use a unique data set which combines data from administrative registers on young people's pathways through the educational system and their family background with survey data on their academic abilities at lower secondary school. The evidence is partly in favour of the relative risk aversion hypothesis.

This is a preview of subscription content, access via your institution.

Author information

Authors and Affiliations


Additional information

Received: 19 August 1999/Accepted: 10 January 2001

All correspondence to Eskil Heinesen. We are grateful to Karin Blix Mogensen and Martin Bøg for excellent research assistance, and to two anonymous referees, John F. Ermisch, Martin Browning, Michael Rosholm, Paul Bingley, and participants at the conference of the European Society for Population Economics in Turin, 1999, for valuable comments and suggestions. Responsible editor: John F. Ermisch.

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Davies, R., Heinesen, E. & Holm, A. The relative risk aversion hypothesis of educational choice. J Popul Econ 15, 683–713 (2002).

Download citation

  • Issue Date:

  • DOI:

  • JEL classification: I21, J24, J62
  • Key words: Educational choice; human capital; intergenerational mobility