Tuesday, May 15, 2012

Risk and occupations

Implicit in this post about performing arts was the riskiness of certain occupations. Certainly the probability of dying or being injured because the job is dangerous is part of this equation (e.g. mining, NFL) but not the part that I want to focus on.

Are some jobs riskier than others because there is a higher probability of being unemployed? Is the variance of earnings higher in some occupations than others? Do some people trade off a job with lower mean but smaller variance because it has more certain payoffs?

Is performing arts - actors and musicians - a riskier occupation than say teaching? How would one go about measuring occupational risk? Is it the probability of unemployment over one's working lifetime condition on being in that occupation? Or is it just the unemployment rate within that occupation? Does being unemployed mean zero earnings so that the the spread in earnings increases - perhaps the earnings needs to be probability weighted.

And so forth.

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