Absolute risk aversion and the returns to education

Individual absolute risk aversion is measured in a sample of 1583 male house-hold heads, using the data drawn from the 1995 wave of the Survey on the Income and Wealth of Italian households. This measure, conditional on household financial wealth, is used as an instrument for attained education in a standard log earnings equation. In line with most of the literature, I find that the gap between the IV and the OLS estimates of the returns to education is large. (C) 2002 Elsevier Science Ltd. All rights reserved.