The Link Between Career Risk Aversion And Unemployment Duration: Evidence Of Nonlinear And Time-depending Pattern

In this study, the authors investigate the nexus between career risk aversion and unemployment duration based on German Survey data (GSOEP). Using a direct measurement of career risk aversion, they do not find a statistically significant linear effect from risk aversion on unemployment duration. However, they find significant effects when controlling for a non-linear or time varying correlation between risk aversion and unemployment duration. The results show that risk aversion is important when deciding when to leave unemployment. This research takes into account the high complexity involved in how risk aversion enters an individual's decision process during a job search.