September 2010

IZA DP No. 5197: Parental Risk Attitudes and Children's Secondary School Track Choice

revised version published in: Economics of Education Review, 2012, 31 (5), 727–743

It is well known that individuals' risk attitudes are related to behavioral outcomes such as smoking, portfolio decisions, and also educational attainment, but there is barely any evidence on whether parental risk attitudes affect the educational attainment of dependent children. We add to this literature and examine children's secondary school track choice in Germany where tracking occurs at age ten and has a strong binding character. Our results indicate no consistent patterns for paternal risk preferences but a strong negative impact of maternal risk aversion on children's enrollment in upper secondary school.