Conformists or Rebels? Relative Risk Aversion, Educational Decisions, and Social Class Reproduction

Anders Holm, Mads Meier Jæger

14 Citations (Scopus)

Abstract

This paper tests the theory of Relative Risk Aversion (RRA), which argues that educational decisions are intended to minimize the risk of downward social class mobility. We propose a structural model which distinguishes the instantaneous utility of educational decisions from the future utility of these decisions with respect to reproducing one's parents' social class position. We analyse British data and find that RRA accounts for some of the observed social class differences in educational decisions. We also find that while more than 90% of individuals derive utility from reproducing their parents' social class position (RRA 'conformists'), a small group of individuals experience disutility from reaching their parents' social class position (RRA 'rebels'). Individuals who experience disutility from reproducing their parents' social class position are characterized by low cognitive ability and a high incidence of behavioural problems in childhood.

Original languageDanish
JournalRationality and Society
Volume24
Issue number2
Pages (from-to)221-253
Number of pages33
ISSN1043-4631
Publication statusPublished - May 2012

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