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Worker Preference and Market Compensation for Job Risk

Jeff E. Biddle and Gary A. Zarkin
The Review of Economics and Statistics
Vol. 70, No. 4 (Nov., 1988), pp. 660-667
Published by: MIT Press
DOI: 10.2307/1935830
Stable URL: http://www.jstor.org/stable/1935830
Page Count: 8
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Worker Preference and Market Compensation for Job Risk
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Abstract

Workers choose a job and receive in return a bundle consisting of income and a probability of job injury. We view this income-job risk bundle chosen by the worker as being exchanged in an implicit market. By jointly estimating the market income-job risk locus and the optimum conditions for utility maximization, we are able to identify the markets locus and parameters of the workers' utility function. In contrast to previous work, we are able to derive valuations of discrete changes in job risk for each individual in the sample. We present evidence that an increase in nonlabor income leads workers to select safer jobs.

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