Characteristics That Influence Financially Risky Occupational Choice

Abstract

Direct employment in agriculture has historically comprised a small percentage of the total population. Improvement of technology and productivity is one reason for this phenomenon, while another is that agriculture is inherently risky. As a result, reliance on agriculture as an occupation introduces additional risk relative to many non-ag occupations. This study determines the characteristics of individuals, who are willing to choose financially risky occupations, with an emphasis on agricultural occupations, compared to the characteristics of those involved in other, non-risky occupations. Data from the Bureau of Labor Statistics National Longitudinal Survey of Youth, are used to determine how demographic and risk preferences influence occupational choice. Results indicate that level of income, marital status, and gender has an impact on occupation choice for financially risky versus non-financially risky jobs. However, the results are improved when risk tolerance is included as a choice factor.